Morning Report – bank earnings 10/11/13

Vital Statistics:

Last Change Percent
S&P Futures 1684.0 -1.0 -0.06%
Eurostoxx Index 2966.3 -3.2 -0.11%
Oil (WTI) 101.7 -1.3 -1.24%
LIBOR 0.244 0.001 0.21%
US Dollar Index (DXY) 80.29 -0.124 -0.15%
10 Year Govt Bond Yield 2.66% -0.02%
Current Coupon Ginnie Mae TBA 105.5 0.1
Current Coupon Fannie Mae TBA 104.6 0.2
RPX Composite Real Estate Index 200.7 -0.2
BankRate 30 Year Fixed Rate Mortgage 4.3
Markets are flattish after yesterday’s rally on the possibility of a deal on the debt ceiling. Bonds and MBS are rallying.
John Boehner and Obama met to discuss a 6 week clean extension for the debt ceiling. The government “shutdown” would remain in place.Neither side agreed to anything.
Earnings season is upon us, and we heard from Wells Fargo and JP Morgan this morning. Wells reported residential mortgage originations were $80 billion for the third quarter, down 29% from the $112 billion in the second quarter. JP Morgan reported a loss due to legal expenses. Their origination volume decreased 18% from the prior quarter.
The government is re-thinking how it releases market-sensitive economic data. Under the current system, the government releases data to the media under an embargoed basis – the reporters have an hour to write their reports and then the data is released to the market. At issue is the fact that high frequency traders have paid for high speed transmission lines to media outlets and they get the raw data a few milliseconds before everyone else does. The idea would be for the government to release the data directly to the media so no one gets a jump on market moving reports.
Monday is a bank holiday and the bond market will be closed, although the equity market will be open. Should be a slow news day.
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