Morning Report – Q1 GDP surprises 4/30/14

Vital Statistics:

Last Change Percent
S&P Futures 1870.8 -1.0 -0.05%
Eurostoxx Index 3196.3 -12.4 -0.39%
Oil (WTI) 100.3 -1.0 -1.01%
LIBOR 0.223 -0.002 -0.89%
US Dollar Index (DXY) 79.59 -0.221 -0.28%
10 Year Govt Bond Yield 2.69% 0.00%
Current Coupon Ginnie Mae TBA 105.6 0.1
Current Coupon Fannie Mae TBA 104.5 0.0
BankRate 30 Year Fixed Rate Mortgage 4.3

 

Markets are slightly lower this morning after GDP came in much, much lower than expected. Bonds and MBS are up small. The market almost does not believe the number.
The advance estimate for first quarter GDP came in at +.1%. The Street was looking for +1.2%, so this is a big surprise. Remember, this is the advance estimate for first quarter GDP and will be subject to two revisions. Given the fact that the SPUS aren’t down 20 handles and the 10 year isn’t yielding 2.6%, the Street clearly thinks this will be revised substantially upward the next time around. Going from 2.6% growth in Q4 to nearly flat GDP growth simply doesn’t comport with all the other numbers we have been getting.
Mortgage Applications fell 5.9% last week. The index is challenging the lows we set in the last week of 2013. The refi index has already broken through that low and is now around the lows set in mid 2008. Purchases fell 4.4%, even though rates were flat. Average loan sizes fell to 239.7k and the refis account for just over half of all applications right now.
The ADP Employment report is forecasting 220k private payrolls for Friday’s jobs report. Last month, the ADP number pretty much nailed it. The Street is forecasting 215k this Friday.
We had some other minor data this morning, with the ISM Milwaukee missing estimates and the Chicago Purchasing Manger’s index beating.
We will hear from the FOMC later today. Given there will be no press conference, I think we should expect nothing major, just another $10 billion in tapering and a commitment to lower rates until the labor market improves. I will be interested to see if the statement references the slowdown in Q1.
The Senate Banking Committee has enough votes to get Johnson Crapo out of Committee, but not enough to bring it to the floor. Six Democrats and six Republicans out of 22 support the measure. The liberals want more effort spent on forcing banks to lend to “underserved” areas.

21 Responses

  1. Frist!

    Biatches!

    Revlot!

    Like

  2. “The liberals want more effort spent on forcing banks to lend to “underserved” areas”

    brilliant!

    Like

    • “The liberals want more effort spent on forcing banks to lend to “underserved” areas”

      I suggest that any such liberals open their own fucking bank and do their own lending into such areas.

      Like

  3. Yeah, that’ll help.

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  4. depends on how you define “help”

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  5. I suggest that any such liberals open their own fucking bank and do their own lending into such areas.

    Of course… since the racist stooges on wall street can’t see an opportunity that is staring them in the face, they should clean up…

    The biggest losses in mortgage land were on $10,000 houses with $100,000 mortgages on them in Detroit, Harrisburg, San Bernardino.. etc…

    Racial discrimination in lending is a figment of the left’s imagination…

    Like

    • McWing;

      MOAR Republican War on Women!

      Interesting article (except for the inevitable use of the mindless euphemism “women’s reproductive rights”.)

      Like

  6. Heckuva job, Barry!

    Like

  7. wow .. not even 4 months between the posts.

    Like

  8. NoVA–I see you finally got your e-mail address verified!

    Like

  9. Here’s a good justification for Bitcoins.

    http://reason.com/blog/2014/04/28/doj-operation-chokepoint-and-porn-stars

    Edit: It’s also a reason that the Republicans are actually right on the CFPB not having any accountability.

    http://www.americanbanker.com/bankthink/operation-choke-point-way-out-of-control-1067013-1.html

    Like

    • jnc:

      Here’s a good justification for Bitcoins.

      It’s also a good justification for state secession. It is an indictment of the corrupted process by which law is made and enforced at the federal level. The power of the federal government has become much too all-encompassing and unaccountable, resulting in an increase in precisely the wrong kinds of people (of which Obama and Holder are perfect examples) occupying positions of power.

      Like

  10. Think Progress is no end of entertaining. Remember, the O admin officially follows its guidance.Health care costs soaring while the economy overall is back in de facto recession. All good according to the Think Communist.

    Like

  11. “I see you finally got your e-mail address verified!”

    It was a campaign finance post. I’m like a moth to a flame on that one.

    Like

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