Morning Report – WMT is NOT rolling back wages 2/19/15

Markets are flattish after Germany rejected a loan extension request from Greece. Bonds and MBS are flattish as well.

Initial Jobless Claims fell to 283k last week, which is a good number given the drop in oil prices. Eventually layoffs will start in the energy patch.

The Bloomberg Consumer Comfort Index rose to 44.6 last week, while the Philly Fed fell and the Index of Leading Economic Indicators ticked down from .5% to .2%.

WalMart reported Q4 earnings that beat analyst expectations. The biggest news out of it, is that WMT is increasing starting wages to $9.00 / hour in April and by Feb next year, all current associates will be making at least $10 an hour, If this is due to market pressures, then that is great news for the economy. If it was due to political pressure (though no one is taking credit so far) then it tells you less. The raise will be part of a larger program to streamline scheduling and other operational issues, and should cost about 20 cents a share over the next year.

The minutes of the Jan FOMC meeting were considered more dovish than expected. Bonds rallied hard on the announcement, as it appears some members are beginning to get cold feet about raising rates this June. Janet Yellen and Ben Bernanke are students of the Great Depression and are probably going to err on the side of waiting too long versus tightening too early.

Freddie Mac took down its numbers for Q1 GDP to 2.5% from 3%, raised 2015 origination forecasts to $1.3 trillion from $1.2 trillion, cut the forecast 30 year fixed rate mortgage rate to 3.9% from 4.2% and is predicting 3.9% home price appreciation. Forecasts for home sales (5.6 million) and housing starts (1.18 million) are unchanged. Affordability is still a tale of two Americas, with the NYC / DC / South Florida / West Coast being unaffordable, and the rest of the country being affordable.

9 Responses

  1. Interesting read:

    “Yanis Varoufakis: How I became an erratic Marxist ”


  2. OT: Coda to the science article that ran recently in the Washington Post.

    “Why science is so hard to believe
    By Joel Achenbach February 12

    The world crackles with real and imaginary hazards, and distinguishing the former from the latter isn’t easy. Should we be afraid that the Ebola virus, which is spread only by direct contact with bodily fluids, will mutate into an airborne super-plague? The scientific consensus says that’s extremely unlikely: No virus has ever been observed to completely change its mode of transmission in humans, and there’s zero evidence that the latest strain of Ebola is any different. But Google “airborne Ebola” and you’ll enter a dystopia where this virus has almost supernatural powers, including the power to kill us all.”

    And from today

    “Limited airborne transmission of Ebola is ‘very likely,’ new study says
    By Lenny Bernstein
    February 19 at 9:38 AM”

    The fight over Ebola wasn’t never about the science. It was about the politics of prioritizing US citizens over those in Africa and the desire to treat the aid workers as selfless heroes who should be honored vs potential public health threats.


  3. “selfless heroes who should be honored vs potential public health threats.”

    they could have been both.


    • More idiotic blather from our president:

      These terrorists are desperate for legitimacy. And all of us have a responsibility to refute the notion that groups like ISIL somehow represent Islam, because that is a falsehood that embraces the terrorists’ narrative.

      I have no such responsibility, not least because I have no idea whether or not it is, in fact, a falsehood. And Obama has no idea either. Further, since I myself make no claims to being Islamic, I don’t really care whether or not ISIL represents Islam. I have no particular interest in saving Islam in general from the stain of those who kill in its name. If other Muslims wish to be spare Islam the stain, then as I said earlier it is their responsibility to stand up and convince us that the killers do not speak for it. It isn’t – it cannot be – the responsibility of the vast majority of us who know almost nothing about Islam whatsoever.

      As usual, this president of ours has things exactly backwards.


  4. Not once their egos demanded that those rules not apply to them.

    Somehow basic quarantine protocol became the anti-Science position. If you want to see politics degrading science from the left, that’s an ideal example.


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