Morning Report – Chinese growth continues to slow 5/5/14

Vital Statistics:

 

  Last Change Percent
S&P Futures  1867.0 -7.4 -0.39%
Eurostoxx Index 3136.3 -41.6 -1.31%
Oil (WTI) 100.1 0.4 0.38%
LIBOR 0.223 0.000 0.00%
US Dollar Index (DXY) 79.49 -0.022 -0.03%
10 Year Govt Bond Yield 2.58% -0.01%  
Current Coupon Ginnie Mae TBA 106.2 0.0  
Current Coupon Fannie Mae TBA 105.2 0.0  
BankRate 30 Year Fixed Rate Mortgage 4.4    

 

Stocks are down after Chinese PMI came in light and showed contraction in the manufacturing sector for the fourth month in a row. Bonds and MBS are rallying.
 
What is going on in the bond market? Bonds seem to be factoring in a global slowdown as China decelerates and the US slows. This has pushed yields to the lowest level since early February and puts it at the bottom of the tight 2.56% – 2.8% trading range we have experienced since then. I wouldn’t bet on this continuing, so if you had any borrowers who were waiting for lower rates, wake them up.
 
Chart: 10 year yield:
 

 

This week promises to be dull on the economic front, as the week following the jobs report usually is. Don’t expect any market-moving releases this week. Earnings season continues, and we will hear from mortgage REIT giant Annaly Capital. During their fourth quarter earnings conference call, Annaly said they intended to build up their balance sheet and increase their portfolio of agency MBS. Based on the chart above, that was a good call. 

 

23 Responses

  1. Mi mi mi mi mi. . .

    Frist!

    Don’t worry, McWing, I’m out of town again toward the end of the week. 🙂

    Like

  2. Worth a read:

    “Why Only One Top Banker Went to Jail for the Financial Crisis
    By JESSE EISINGER
    APRIL 30, 2014”

    http://www.nytimes.com/2014/05/04/magazine/only-one-top-banker-jail-financial-crisis.html?_r=0

    Like

    • jnc:

      “Why Only One Top Banker Went to Jail for the Financial Crisis”

      The framing simply perpetuates the politically preferred myth that banks and bankers “caused” the financial crisis. Serageldin was convicted of fraud for concealing losses, but concealing those losses did not cause them. They occurred, and would have occurred, all without Serageldin’s deception.

      The collapse of the housing market, and the resulting credit crisis in the financial markets, was not caused by criminal actions. So there is no reason for anyone to expect that bankers should go to jail “for the financial crisis”.

      Like

  3. Typical wingnut. We all *know* what caused the crash, Wealth Inequality!

    Duh!

    Like

  4. Finally, a white Liberal that wants to tell me how racist I really am! It’s literally been minutes since the last time.

    According to Capehart, I’m just a RCH from dragging behind my truck the next black I see a la James Byrd.

    http://m.washingtonpost.com/opinions/that-honest-conversation-about-race-everyone-wants-we-cant-handle-it/2014/05/02/dbdf019c-d203-11e3-a6b1-45c4dffb85a6_story.html

    So, this National Conversation on Race is really just me publicly self-flagellating and then becoming a Progressive.

    #I’dRatherReigninHell

    Like

  5. Franklin Raines presided over an accounting fraud that rivaled Enron and paid himself tens of millions in compensation. No one has even said “boo” to him.

    He is a Black liberal, he gets a pass because he was trying to help the poor own a home.

    Like

  6. SuperPACs as the new conspicuous consumption. It’s going to be amateur hour with everyone thinking they can run the show.

    http://www.nationaljournal.com/magazine/this-man-is-the-future-of-super-pacs-20140505

    Like

  7. NoVA – Victory for the next generation.

    Millennials have stopped trusting the government
    Updated by Andrew Prokop on May 5, 2014, 2:10 p.m. ET

    http://www.vox.com/2014/5/5/5683176/millennials-have-stopped-trusting-the-government

    Like

  8. I wonder why people think that’s a bad thing?

    Like

  9. Hi all .. been slammed at the office today. but good news on that vox story.

    Like

    • Idk how to take that Kennedy School stuff – seems a bit precious, to me.

      This always reminds me of my oldest daughter’s summer anthropology class at OR in Eugene in 1991. The prof, for some reason, was extolling affirmative action in college admission. My daughter suggested that an unintended consequence was that many Asian-American kids got bumped from admissions. The class was stony silent. The prof said “OR is already 38% Asian-American”. My daughter said that stats on entrance wouuld have made a merit system approach appear 63% Asian-American and 25% Jewish, to boot. So the policy of OR increased non-Jewish Anglos from 10% [would have been 2% black, MX, and Native American] to 40% non-Jewish Anglos. She sat down. Dead silence. She called me that night to tell me it was an amazing display of PC and groupthink and she was afraid she would flunk no matter what she did the rest of the term.

      She made an “A” but never spoke in class again.

      Like

  10. FYI – Mark I’ll be in Austin for Week 2 of the ACL fest. 10/10 – 10/12.

    Like

  11. Did any of you get the news last night about the big overpass on the 15 (route to and through Vegas) burning? It was still just a wood structure, six months into construction, and burned all night. They had to close the 15 in both directions. Our son is driving a moving truck, our DIL is driving her car with our grandson in the back seat, on their way to CO this afternoon or early evening………………..sheesh.

    There aren’t any good short cuts, the one they’re taking traffic is over the mountains and then along the back of the mountains catching up to the 15 beyond the fire. They’re saying the road could be closed for a couple of days at least. They really need to get out of Dodge today or tomorrow morning at the latest. Just their luck! But then maybe I’ll have one more night with my grandson……………..hahahaha too bad!

    Next weekend I’ll be taking our granddaughter shopping for shoes and jewelry for her Jr/Sr Prom so I have that to look forward to as well. She’s staying behind a few weeks to finish up the school year.

    We found out yesterday that it’s likely they’ll hit a small snow storm going through the Vail Pass also…………….what pioneers!

    Like

  12. Lulu–it probably isn’t a “short cut”, but what about taking I5 north to I80 east? In Utah they could cut down to I70 and head into CO.

    Like

  13. Or I-10 to Phoenix and then I-17 (I think) up to Flagstaff and then east or go up to Page and through Monument Valley. That’s an unbelievable drive by the way.

    Like

  14. It would be I-10 to Phoenix then I-17 North to Flagstaff, Once there it’s 89 up to 160 and then 160 onto the Big Res and up to the Four Corners all the way into Colorado.

    Like

  15. Thanks for the suggestions, I’ll pass them along. Apparently they have one lane of the 15 open but it’s southbound this morning. My son’s a map junkie so I imagine he’ll figure something out. They wanted to show the little guy Vegas tonight but it’s no big deal……………I’m sure we’ll all be making the drive numerous times over the next several years anyway. Plenty of time for Vegas. I like the Phoenix/Flagstaff route and have made that drive before.

    Like

  16. Vegas, Vegas

    headed out there in a month. can’t wait.

    No 4, work the 6 and 8 coming out!

    Like

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