Morning Report: Inflation is picking up 11/14/17

Vital Statistics:

Last Change
S&P Futures 2577.0 -5.0
Eurostoxx Index 384.4 -1.8
Oil (WTI) 56.5 -0.3
US dollar index 87.5 0.0
10 Year Govt Bond Yield 2.39%
Current Coupon Fannie Mae TBA 102.875
Current Coupon Ginnie Mae TBA 103.938
30 Year Fixed Rate Mortgage 3.87

Stocks are lower on overseas weakness. Bonds and MBS are flat.

Inflation at the wholesale level picked up in October, according to the Producer Price Index. The headline number rose 0.4% MOM and 2.8% YOY on services inflation, which is being driven (hopefully) by increased compensation. The core rate was up 0.2% MOM and 2.3% YOY.

Small business optimism picked up in October on strong labor readings. The average firm added .17 workers, while job openings stayed in record territory. In fact, the inability to find qualified workers was the second biggest headache for small business. As an aside, I wonder if this is an inability to find qualified workers, or an inability to find qualified workers who can pass a drug test. A net 27% of firms reported increasing compensation.

People are spending money on their homes. The Despot reported strong Q3 earnings with comparable store sales up 7.9%, despite the hurricanes. I guess when inventory is as low as it is, people will remodel their current home instead of moving. 203ks anyone?

Loan delinquencies are falling, according to CoreLogic, however we are seeing a bump up in the oil patch states, especially around Houston and in Alaska. 30+ DQ rates fell 0.6% YOY to 4.6% in August. These were the lowest numbers in a decade, however the hurricanes will probably bump up those numbers in the next few readings. The number in foreclosure fell to 0.6% from 0.9% a year ago.

The Senate came to an agreement to limit some of the post-crisis financial regulation for small and medium sized banks. The threshold for additional scrutiny was increased from $50 billion in assets to $250 billion in assets. Some larger banks who have a more traditional business like US Bancorp and PNC, were hoping for some relief, but didn’t get any. “This is the first proposal that has a legitimate shot at making it to the president’s desk,” said Milan Dalal, an attorney at lobbying firm Brownstein Hyatt Farber Schreck in Washington and a former aide to Sen. Mark Warner (D., Va.), who backed Monday’s deal.

16 Responses

  1. Why do you think it is drug test related? Local experience of folks you know in CT? A report from a group like NFIB? What?


    • I can’t remember where I was reading about it… Probably the WSJ or Bloomberg… It was an article on the opiod crisis and how manufacturers were struggling because they couldn’t find workers who could pass a drug test. I have heard that the trucking industry has the same issue…


  2. a day late and a dollar short. guess now that he is of no use to the Party it is time to throw him under the bus….

    Though i have to say “bravo” to her for figuring out a way to pin all of the left’s hypocrisy on the right.. That is talent…


  3. Baby, why you make me hit you?


  4. Pence looks smarter every day.


  5. Might as well take your money and burn it in the bonfire…


  6. Baby, why you make me hit you?

    cleverly bully students into a prescribed role in a formulaic drama: intolerant liberal “snowflakes” silencing courageous speakers of uncomfortable truths.


  7. Leahy.


  8. This is a pretty good overview of Joe Biden’s child sexual predation.


    • I have to admit it is all a little creepy. But the Sessions video is obviously mischaracterized. Sessions does not swat his hand away. It appears that the girl’s hair somehow gets caught up on Sessions’ coat, and after untangling it from his coat, Sessions is just smoothing out or brushing the girl’s hair as Biden reaches in. He’s not swatting away Biden’s hand.


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