Morning Report: Markets stabilizing? 1/21/16

Stocks are up this morning as ECB President Mario Draghi hinted at further easing in March. Bonds and MBS are up small.

ECB President Mario Draghi said that downside risks to the economy have increased and the ECB could possibly reconsider its policy stance in March. The ECB did leave rates unchanged this month.

Stocks got pummeled yesterday with the Dow down 566 points in early afternoon. Markets then turned around on no real news and rallied into the close to cut the losses for the day. The 10 year got down to 1.94%.

The carnage in the markets is largely a result of how leveraged the entire system is. In many cases, people are selling to cover margin calls. Margin selling begets margin selling, which is why markets are so skittish these days.

Initial Jobless Claims rose to 293k from 283k yesterday. This is the highest level in 6 months. The Philthy Fed Index improved from -10.2 to -3.5.

We are starting to see more announcements about job cuts. Johnson and Johnson is cutting 3,000 and Barclay’s is letting 1,200 go as it pulls out of Asian markets.

TRID rules are increasing the time it takes for a closing by 5 days, according to the National Association of Realtors. We could see the effect of that tomorrow when they report existing home sales. November’s numbers were depressed, so people will be looking for a rebound in December.

6 Responses

  1. Heh heh heh heh heh.

    Frist!

    Like

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