Morning Report – Fed Day 3/18/15

Stocks are lower this morning as we await the Fed’s decision at 2:00 pm. Bonds and MBS are higher as worldwide sovereigns mount a ferocious rally. Oil continues its slide, down $1.20 a barrel to $42.26.

While the Street will undoubtedly focus on the removal of the word “patient” from the FOMC statement, Janet Yellen will probably stress that this change in language merely opens the door for a June rate hike, and does not mean they have already decided to do so. The Fed will remain data-dependent and will probably want to see some sort of rebound from the weather-driven weakness of Q1. It is interesting to see the US exit ZIRP when countries like Sweden are implementing NIRP, where the Riksbank cut rates to -0.25%.

Mortgage Applications fell 3.9% last week. Purchases fell 1.5% while refis fell 5.2%. This was the week after the jobs report where interest rates spiked to 2.24% and then slowly came back.

Macroeconomic bellwether FedEx reported better than expected numbers this morning, however it took down 2015 numbers based on dollar strength. This will probably become a bit of a trend as we enter pre-announcement season and the big multinationals take down their full year forecasts. Earnings season is only two weeks away.

10 Responses

  1. “Patient”

    There–I said it! Also and too, frist!

    Like

  2. 10 year yield down 12 bps… surprising reaction…

    Like

    • 10 year yield down 12 bps… surprising reaction…

      I get that it is not the usual reaction, but wonder what you think caused it. Speculation is welcome!

      Like

      • Mark:

        I get that it is not the usual reaction, but wonder what you think caused it.

        They removed the word “patient”, but added a bunch of data dependent language suggesting more dovishness. Market has largely priced a June hike out, pushing the first hike out to September.

        Like

    • McWing:

      Those of us of a certain age will be amused by this.

      I remember seeing it for the first time in high school. A strange breed of movie. It was one of several good Aussie movies that came out at the time and were showing on HBO, including Breaker Morant and The Club. Great movies all.

      Like

  3. I first saw it at a midnight showing. There is still something about watching it late at night that makes it better.

    I did enjoy Breaker Morant.

    Heresy here but I thought Mad Max was boring. This does not look boring however.

    https://m.youtube.com/watch?v=akX3Is3qBpw

    Like

    • McWing:

      Heresy here but I thought Mad Max was boring.

      I agree. Road Warrior was way better. Too much dialogue in Mad Max!

      Like

  4. I liked them both, although I saw Mad Max after the Road Warrior.

    I was more interested in the origin of the V-8 Interceptor than anything else.

    Like

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