Morning Report: ADP payrolls come in light 11/1/17

Posted on November 1, 2017 by Brent Nyitray

Vital Statistics:

Last Change
S&P Futures 2583.0 10.0
Eurostoxx Index 397.8 2.5
Oil (WTI) 55.0 0.6
US dollar index 87.8 0.1
10 Year Govt Bond Yield 2.39%
Current Coupon Fannie Mae TBA 102.68
Current Coupon Ginnie Mae TBA 103.75
30 Year Fixed Rate Mortgage 3.99

Green on the screen this morning as markets rally worldwide. Bonds and MBS are down.

The Fed decision is due at 2:00 pm EST today. No changes in interest rates are expected, but there is always the risk that something in the statement could move rates. Be careful locking around then. Separately, Donald Trump is scheduled to announce Yellen’s replacement tomorrow.

Mortgage applications continue to fall (six times in the last seven weeks), according to the MBA. Applications decreased by 2.6% as purchases fell 1% and refis fell 5%. Mortgage rates hit a low for 2017 in September, but have risen about 20 basis points since then. The average contract interest rate was 4.22%, an increase of 4 basis points from last week.

ADP saw an uptick in payrolls for October, increasing to 235k. September was revised downward to 110k due to the hurricanes. Many were expecting to see a bigger rebound for October, but it hasn’t happened, at least according to ADP. The BLS is announcing payrolls on Friday, with the Street looking for 325k.

Construction spending rose 0.3% in September, according to the Census Bureau. On a YOY basis, it is up 2%. Residential construction was flat on a month-over-month basis but is up 9.6% YOY.

Manufacturing is still strong, according to the ISM index. It slipped slightly in October to 58.7 from 59.5. Hurricane effects are probably having some effect here.

House Republicans moved back their tax reform reveal by a day, which shows there is some disagreement in whether this can pass. With uniform opposition from Democrats, it will only take a few Republicans to kill it. The state and local tax deduction will probably prove to be the deal killer, and while many Republicans have big philosophical objections to the estate tax, it probably isn’t a hill worth dying on. While people have historically considered senior citizens to be the third rail of politics, in all reality, it is the upper middle class (especially the HENRY’s, which stands for high earnings, not rich yet). They are the ones most affected by changes in 401k contributions, state and local tax deductions, and the mortgage interest deduction. The top 20% pays 95% of the income taxes in this country, according to OMB.

Filed under: Economy, Morning Report |

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18 Responses

  1. Brent Nyitray, on November 1, 2017 at 10:55 am said:

    holy shit

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  3. Brent Nyitray, on November 1, 2017 at 12:12 pm said:

    Well, if we are talking socialism, you would take 80% of her candy, burn 70%, and hand out the rest to your comrades in the party…

    Still, fun to see the left get all triggered over this…

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  6. Let the mutherfuker burn!, on November 1, 2017 at 7:13 pm said:

    It’s hard for me to give a shit about this for a couple of reasons, first, their officers. Second, the defendant did and does deserve a bullet in the back of the head after he was “tortured”.

    Churchill was right about Nuremberg and we should have followed his advice then and now.

    http://www.miamiherald.com/news/nation-world/world/americas/guantanamo/article182031196.html

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  7. ScottC, on November 2, 2017 at 6:21 am said:

    McWing…..congrats to Houston on the World Series win!

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    • markinaustin, on November 2, 2017 at 7:25 am said:

      Great Series. I fell asleep when the Dodgers tied the fifth game at ten. Most exciting game in forever and I fell asleep right before it ended. Old age sometimes sux. I was really happy last night that the game ended before I lost consciousness, and that the ‘stros won.

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    • Michigoose, on November 2, 2017 at 7:52 am said:

      Indeed–I was rooting for Houston. Congrats, George!

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  8. Let the mutherfuker burn!, on November 2, 2017 at 8:36 am said:

    There is a lot to laugh at in the piece about Moar Hawt Blue on Blue action.

    https://www.politico.com/magazine/story/2017/11/02/clinton-brazile-hacks-2016-215774

    I had tried to search out any other evidence of internal corruption that would show that the DNC was rigging the system to throw the primary to Hillary, but I could not find any in party affairs or among the staff.

    Other than herself, of course.

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    • markinaustin, on November 2, 2017 at 8:57 am said:

      The thrust of that article is that HRC took control of DNC money for her campaign before she was the nominee, which was outside Party rules, but arranged by the ever popular curly haired lightweight Debbie Wasserman Shultz. Brazile had to admit all that to Sanders when she looked into what had gone on. So when she wrote any other evidence it was in reference to aside from the DNC in the tank for HRC, there was no other evidence.

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