Morning Report: Hard vs. soft data 4/20/17

Vital Statistics:

Last Change
S&P Futures 2340.3 6.5
Eurostoxx Index 377.6 0.3
Oil (WTI) 50.6 0.1
US dollar index 89.7  
10 Year Govt Bond Yield 2.23%
Current Coupon Fannie Mae TBA 103
Current Coupon Ginnie Mae TBA 104.04
30 Year Fixed Rate Mortgage 3.95

Stocks are up this morning as earnings continue to roll in and oil rebounds. Bonds and MBS are down small.

Initial Jobless Claims ticked up slightly to 244k last week, while the Philadelphia Fed Business Outlook survey cooled from its earlier torrid pace.

The Index of Leading Economic Indicators came in better than expected at 0.4%, but is a drop from February.

Since the election, we have seen a disconnect between the hard data and the soft data. Hard data includes things like the Philly Fed survey, which are often sentiment-heavy indices. These have been exceptionally strong over the past few months, while the actual hard data releases (manufacturing production, retail sales, etc) have been tepid. Stock market bulls have been betting that the hard data would eventually catch up (in other words the optimism would begin to manifest itself into real spending). Instead, it looks like the the opposite is happening – the actual hard data is remaining more or less where it has been for the past 8 years and the sentiment indicators are coming back down to Earth. It is still early days, and regulatory relief will take some time to manifest itself in the numbers, but optimists hoping for a quantum leap in economic activity look like they are going to be disappointed.

Fed Vice Chairman Stanley Fischer doesn’t foresee another 2013-esque “taper tantrum” when the Fed begins to wind down its balance sheet. His view is that the current pace of policy normalization is appropriate and is designed to balance risks to the US and global economy. “A gradual and ongoing removal of accommodation seems likely both to maximize the prospects of a continued expansion in the U.S. economy and to mitigate the risk of undesirable spillovers abroad,”

Refis fell to 37% of all originations in March, according to the Ellie Mae Origination Insight Report. Time to close fell as well, to 43 days, which is the shortest time in 2 years. Interestingly, closing rates fell in March to 68%. Closing rates were 73% at the end of last year, so it is unclear what changed. The average FICO score ticked up a point to 721.

Want an idea of how hot real estate is in the Bay Area? A two bedroom, 988 square foot teardown bungalow in Oakland went on the market at 495k and ended up selling for over $750k.

14 Responses

  1. Regardless of what you think about hate crimes in the first place, the fact the left is getting their panties in a wad over this is pretty funny.


    • Oh, the unitentional irony:

      ““It almost seems like the officers were trying to make a political point by charging the defendants with that statute versus actually applying the law,” Steven Silverman, a Baltimore attorney who has worked on hate crimes cases, told TPM. “It’s an absurd hypothesis and a total misapplication of the statute.””


    • I like this one from Ace yesterday. The dumb broad doesn’t have the courage of her convictions.

      To me, the priceless part is when she pulls down her bandana and throws down her metal pole and stomps off in a fit of pique.

      Then the cop makes her come back and pick it up.

      Real tough guy.


  2. I am baffled at how this happened?

    Best to kill another black man selling “loosies.”


  3. Amusing:

    “Shattered is sourced almost entirely to figures inside the Clinton campaign who were and are deeply loyal to Clinton. Yet those sources tell of a campaign that spent nearly two years paralyzed by simple existential questions: Why are we running? What do we stand for?”


    • which is a problem they’ll continue to have, provided Trump doesn’t totally faceplant.

      fill out schedule b, you’ll have your focus group approved talking points in 6 to 8 weeks.


      • They were so desperate that they even considered trying the truth:

        “In the Clinton run, that problem became such a millstone around the neck of the campaign that staffers began to flirt with the idea of sharing the uninspiring truth with voters. Stumped for months by how to explain why their candidate wanted to be president, Clinton staffers began toying with the idea of seeing how “Because it’s her turn” might fly as a public rallying cry.”

        Also, it’s hilarious how people just discover Commerce Clause overreach during Trump’s term.


        • jnc:

          Also, it’s hilarious how people just discover Commerce Clause overreach during Trump’s term.

          No Constitutional arguments can be taken seriously anymore, even when they are correct. Almost no one prioritizes fidelity to the Constitution and its limitations on power as a matter of principle. Policy outcome is all that really matters. Constitutional law has become nothing more than an exercise in post hoc justification for preferred policy.



  4. Good piece on the Republicans overall problem with their health care arguments:

    “The GOP’s problem on health reform is they’ve spent years hiding their real position
    America’s most interesting policy fight is between the Republicans’ real and fake health policies.
    Updated by Ezra Klein
    Apr 17, 2017, 1:30pm EDT

    The most interesting policy argument in America right now is the debate between conservatives’ real position on health care and their fake position.

    The fake, but popular, position goes something like this: Conservatives think everyone deserves affordable health insurance, but they disagree with Democrats about how to get everyone covered at the best price. This was the language that surrounded Paul Ryan and Donald Trump’s Obamacare alternative — an alternative that crashed and burned when it came clear that it would lead to more people with worse (or no) health insurance and higher medical bills.

    Conservatives’ real, but unpopular, position on health care is quite different, and it explains their behavior much better. Their real position is that universal coverage is a philosophically unsound goal, and that blocking Democrats from creating a universal health care system is of overriding importance. To many conservatives, it is not the government’s role to make sure everyone who wants health insurance can get it, and it would be a massive step toward socialism if that changed.”

    & how they have succeeded at making the PPACA more popular.


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