Morning Report – Strong ADP number 7/2/14

Vital Statistics:


Last Change Percent
S&P Futures 1967.0 1.2 0.06%
Eurostoxx Index 3259.1 0.4 0.01%
Oil (WTI) 104.8 -0.6 -0.55%
LIBOR 0.235 0.003 1.21%
US Dollar Index (DXY) 79.97 0.156 0.20%
10 Year Govt Bond Yield 2.60% 0.03%
Current Coupon Ginnie Mae TBA 106.3 -0.1
Current Coupon Fannie Mae TBA 105.6 -0.2
BankRate 30 Year Fixed Rate Mortgage 4.17


Stocks are higher (and bonds are lower) after an unusually strong ADP report.
The ADP Employment Report estimated the economy added 281,000 jobs in June, versus expectations of 205,000. The official jobs report comes out tomorrow, and the consensus forecast is 215,000. The ADP number supports the forecast coming out of Markit last week of about 280,000 jobs as well. Construction added 36,000 jobs. More on the increase in hiring.. Maybe, finally, “recovery summer” will not be the running joke it has been since 2009.

Mortgage Applications fell .2% last week, according to the MBA. Purchases were down .7%, while refis were up .1%.  Disappointing print given that the 10 year dropped 9 bps last week and the Bankrate 30 year fixed rate mortgage fell from 4.22% to 4.14%.
Home prices rose 1.4% in April, according to CoreLogic. Prices are 13.5% below their April 2006 peak. This increase in prices has been a double-edged sword – it has pulled many people out of negative equity, but it has decreased affordability, especially with the first time homebuyer. CoreLogic expects price appreciation to cool over the next year.
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