Morning Report: Bond yields hit a 2017 low on weak data 6/14/17

Posted on June 14, 2017 by Brent Nyitray

Vital Statistics:

Last Change
S&P Futures 2440.8 2.8
Eurostoxx Index 390.4 1.7
Oil (WTI) 46.1 -0.4
US dollar index 87.9 -44.0
10 Year Govt Bond Yield 2.14%
Current Coupon Fannie Mae TBA 103.31
Current Coupon Ginnie Mae TBA 104.375
30 Year Fixed Rate Mortgage 3.95

Stocks are higher this morning ahead of the Fed decision. Bonds and MBS are up, with the 10 year hitting a 2017 low. That sound you hear this morning is the sizzle of bond bears getting roasted over the fire.

The Fed decision is scheduled to be released at 2:00 pm EST, and there will be a press conference as well. There could be some bond market volatility around that time, so be aware. Things to watch for: a move down in rate forecasts on the dot plot, and discussion about unwinding the balance sheet.

Mortgage Applications increased 2.8% last week as purchases fell 3% and refis rose 9%. The drop in purchase applications is largely due to technical adjustments to the index due to the Memorial Day holiday. Unadusted, the index was up 19% and is up 8% YOY. The refi percent increased to 45.4%, which was the highest since November. As home price appreciation continues, borrowers with sufficient equity should consider refinancing out of FHA into conventional to save on MI.

Lower energy prices moved inflation lower in May. The Consumer Price Index fell 0.1% last month and is up 1.9% on a YOY basis. Ex-food and energy, prices rose 0.1% and are up 1.7% YOY. These numbers were lower than street expectations.

Retail sales fell 0.3% MOM and are flat on a YOY basis. Lower gasoline prices, along with slower motor vehicle sales drove the drop. The core control group was flat, but April was revised upward from 0.2% to 0.6%. On a YOY basis, they were up 3.8%.

Brokers pretty much got decimated after the financial crisis, but they are coming back, slowly but surely. While subprime is a maybe 2% of what it was during the go-go days, the infrastructure is getting built back. One of the biggest challenges is finding brokers who remember how to do subprime loans.

Another big question regarding the mortgage market: Where are the boomerang buyers? The people who bought during the boom years, and were foreclosed on early in the bust are now seeing that foreclosure fall off their credit reports. So far, they have been slow to materialize, however high home prices, low affordability, and competition are playing a part.

Filed under: Economy, Morning Report |

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39 Responses

  1. markinaustin, on June 14, 2017 at 10:55 am said:

    Did anyone else think that the Cabinet KissAss meeting was beyond weird?

    Mattis was the only one who didn’t play along.

    If you did not see it, I can find a link.

    Also, you can’t trust liberals with guns at Republican baseball practices.

    Liked by 1 person

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  2. Brent Nyitray, on June 14, 2017 at 12:08 pm said:

    Hey, when is obama going to lecture us about Eleutherophobia and how that isn’t “what we are?”

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  3. novahockey, on June 14, 2017 at 1:10 pm said:

    poor vox

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  5. ScottC, on June 15, 2017 at 8:05 am said:

    The NYT does what the NYT does:

    Was this attack evidence of how vicious American politics has become? Probably. In 2011, when Jared Lee Loughner opened fire in a supermarket parking lot, grievously wounding Representative Gabby Giffords and killing six people, including a 9-year-old girl, the link to political incitement was clear. Before the shooting, Sarah Palin’s political action committee circulated a map of targeted electoral districts that put Ms. Giffords and 19 other Democrats under stylized cross hairs.

    Conservatives and right-wing media were quick on Wednesday to demand forceful condemnation of hate speech and crimes by anti-Trump liberals. They’re right. Though there’s no sign of incitement as direct as in the Giffords attack, liberals should of course hold themselves to the same standard of decency that they ask of the right.

    That the Palin map even indirectly, much less directly, “incited” Loughner to shoot Giffords is an out-and-out lie. Despite that being the narrative pushed by the NYT and other leftists in the immediate aftermath of the shooting, 6 years later there still exists literally no evidence suggesting, nor reason to believe, that Loughner ever even saw the map, much less that it played any part in his motivations.

    The NYT serves pretty much the same function that Pravda served in Soviet era Russia.

    Liked by 1 person

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    • novahockey, on June 15, 2017 at 8:13 am said:

      “Though there’s no sign of incitement as direct as in the Giffords attack,”

      oh FFS

      Liked by 1 person

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    • Let the mutherfuker burn!, on June 15, 2017 at 8:26 am said:

      I’m curious if they believe it themselves.

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    • Brent Nyitray, on June 15, 2017 at 9:14 am said:

      Well, it isn’t as if he completely covered his tracks by shouting Allahu Akbar or something. Then we would never know why he did it.

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      • ScottC, on June 15, 2017 at 9:17 am said:

        Brent:

        Well, it isn’t as if he completely covered his tracks by shouting Allahu Akbar or something. Then we would never know why he did it.

        lol

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    • jnc4p, on June 15, 2017 at 10:13 am said:

      They caved due to the blow back:

      “They caved:

      “Correction: June 15, 2017
      An earlier version of this editorial incorrectly stated that a link existed between political incitement and the 2011 shooting of Representative Gabby Giffords. In fact, no such link was established.”

      Also changed the actual editorial:

      “At the time, we and others were sharply critical of the heated political rhetoric on the right. Before the shooting, Sarah Palin’s political action committee circulated a map of targeted electoral districts that put Ms. Giffords and 19 other Democrats under stylized cross hairs. But in that case no connection to the shooting was ever established.”

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  8. Let the mutherfuker burn!, on June 15, 2017 at 9:46 pm said:

    Like

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  9. Let the mutherfuker burn!, on June 17, 2017 at 12:16 pm said:

    Unfortunately, they don’t actually believe this.

    I wish they did, cause I’m very on board with it.

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    Reply

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