Morning Report: Bank of Japan to the rescue 1/29/16

Stocks and bonds are higher this morning after the Bank of Japan instituted negative interest rates in an attempt to improve their struggling economy and weaken the yen.

The Bank of Japan’s move caused a worldwide bond rally, which has brought the US 10 year bond solidly below 2%. Mortgage bankers could catch a break here as refi activity will pick up.

We have a lot of economic data this morning

Fourth quarter GDP came in at an anemic 0.7%, missing the Street estimate of 0.8%. The only bright spot of the report was consumption, which increased 2.2%

Inflation remains well-contained with the PCE (the preferred inflation measure of the Fed) increasing at 0.8%, and the core index increasing at 1.2%

The Employment Cost Index rose at 0.6% as wage inflation remains nowhere to be found.

Consumer sentiment slipped in January, while the ISM Milwaukee and Chicago Purchasing Manager Indices increased.

The homeownership rate increased by a tenth of a percent in the fourth quarter to 63.8%. It bottomed in the second quarter at 63.4%. Median asking rent increased 6% from the third quarter to $850. On an annualized basis, it increased 11%.

Household formation dropped to 460,000 in the fourth quarter from 1,447,300 in the third quarter. This almost looks like a data error. If household formation was slowing that much, you wouldn’t see the tight inventory of housing that we have.

12 Responses

  1. Bwahahahaha!!!!

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  2. Spot on:

    “Obama Praises Own Strength, Resilience In Face Of Hardship During State Of The Union
    NEWS IN BRIEF
    January 12, 2016 ”

    http://www.theonion.com/article/obama-praises-own-strength-resilience-face-hardshi-52152

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    • Front page of today’s post on the email thing. Any lesser man would have been arrested by now. Or promoted. Seems theses are the only options.

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  3. Why do partisan divides require healing? Is disagreement bad? If so, why?

    The two communities, located in the most lopsidedly partisan counties in the state, reflect the vast political chasm here and across the country, a divide that President Obama was unable to heal and which may prove insurmountable for whomever takes his place.

    http://www.latimes.com/nation/politics/la-na-iowa-alternate-universes-20160131-story.html

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  4. Revealing slip of the tongue, and why I pay no attention to the SOTU.

    http://dailycaller.com/2016/01/25/obama-chuckles-about-when-he-heard-of-10-sailors-in-iranian-waters-audio/

    “This job right here, you don’t have the luxury of just focusing on one thing,” Obama said. “You’ll recall, I was sitting at my desk there just a little over a week ago, writing my convention speech, er my State of the Union speech, and somebody walks in and says, ‘A couple of our sailors wandered into Iranian waters.’”

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  5. I love the part about how he was writing the speach. Apparently he employs no speech writers.

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