Morning Report: FOMC and Jobs Report will be the highlights of the week 1/29/18

Vital Statistics:

Last Change
S&P Futures 2867.8 -6.8
Eurostoxx Index 400.4 -0.2
Oil (WTI) 54.7 -0.4
US dollar index 83.4 0.3
10 Year Govt Bond Yield 2.71%
Current Coupon Fannie Mae TBA 103.591
Current Coupon Ginnie Mae TBA 103.688
30 Year Fixed Rate Mortgage 4.19

Stocks are lower this morning on no real news. Bonds and MBS are down.

This should be a big week for the bond market, with the FOMC meeting in the middle of the week and the jobs report on Friday. No move is expected at the FOMC meeting, but people will focus on the language of the statement. Since this is Janet Yellen’s last meeting most of the attention will probably be on her and not the statement.

Aside from the Fed meeting this week, Treasury will announce 10 and 30 year bond issues, and the expectation is that it will be the first increase since 2009. With Treasury selling more paper, while the Fed cuts its purchases, it could be a rough week for bonds.

Personal Incomes and Personal Spending rose 0.4% in December. The PCE price index was up .1% MOM / 1.7% YOY and the core PCE price index was up .2% MOM and 1.5% YOY. This puts the core PCE index at an increase of 1.5% for the year, and marks the 6th year in a row inflation has undershot the Fed’s target. The savings rate is the lowest since 2005.

Freddie Mac’s total loan portfolio increased 9% on an annualized basis in December. Their DQ rate slipped from 1.08% to .97%.

Home prices rose annually for the 67th consecutive month to $283,000 according to the Black Knight Financial Services Home Price Index. The MOM gain was .27%. As of November, home prices were up 6.5% for the year.

23 Responses

  1. Great quip by Jamie Dimon. Davos is where billionaires tell millionaires how the middle class feels…

    Liked by 1 person

  2. From the “No Shit” file.

    It’s frustrating that they’re just shrugging their shoulders with this information, as if no one warned them. I see no effort to promote those that said this was going to happen, no recrimination. Trillions of dollars spent? Eh, whataya gonna do?

    Liked by 2 people

    • Similarly, people who smoke cigarettes save the government money because they die earlier…

      Liked by 1 person

    • McWing:

      It’s frustrating that their just shrugging their shoulders with this information, as if no one warned them.

      This was a well known fact even back in 2009 before ACA was signed. The left just didn’t care. And they don’t really care even now, which is why they hedge the hard facts with the wholly subjective:

      But money doesn’t have to be saved to make something worthwhile. Prevention improves outcomes. It makes people healthier. It improves quality of life. It often does so for a very reasonable price.

      “Reasonable”…. to who?

      Liked by 1 person

      • Exactly. The left will lie, cheat, and steal to increase the power of the state. It. Is. What. They. Do.


      • Does government funded prevention really improve outcomes? Or are you paying for people to do what they’d do anyway? And others just don’t no matter who is payig. Outside of colonoscopies, prostate exams, and mammograms (and pap smears) how much does prevention improve outcomes?

        Chances are regular physical exercise and a healthier diet would improve outcomes better than preventive medicine. So … maybe we should pay people to exercise? Eat better?


    • god, this argument.
      i’ve stopped responding to it. it’s idiotic on its face. if we spend X on prevention, we’ll stop heart attacks. or diabetes. or whatever. and save.

      no, you won’t. it doesn’t work that way.
      but WTF do I know, I’ve only been in health policy for almost 20 years

      Liked by 1 person

  3. Juiceboxer weighs in on Julian Peterson


    • Julian Peterson is a football player, right?

      I love the line about conservative rhetoric constantly confusing disagreement with silencing . . . A: It’s ironic. B: I don’t see much of that, but maybe I’m missing something and C: That does not seem to be the thrust of Peterson’s arguments, at all. He only gets into the “silencing” or “completely mangling my arguments” part when other people drag him there, so far as I’ve seen. I’m sure he’s brought up liberal cultural censorship at some point, but I don’t see that as a big thrust in Peterson’s rhetoric, or have I missed some big news?


    • Brent:

      Juiceboxer weighs in on Julian Peterson

      The amount of projection that the left engages in never ceases to amaze me.

      Liked by 1 person

    • He is so completely oblivious to the fact that 99% of the commentary out there is off-the-rack center/left pablum that everyone else is peddling. The reason why he gets $600k is because he is saying something different…

      Liked by 1 person

    • I will never understand how a tiny proportion of the population has become such a cause celebre for the left. They own that party lock, stock, and barrel…

      Liked by 1 person

  4. Now that Cleveland has been forced to retire Chief Wahoo can we send Elizabeth Warren to the Indians for a couple of prospects and a used pitching machine?

    Liked by 1 person

    • Larger employers are starting to contract directly with medical groups — but you need to have enough covered lives for it work. this looks like the next phase. but there’s a lot of regulatory barriers they’ll need to overcome if they are going to be self-insured and provide the care. and the non-profit aspect doesn’t change that.

      the real issue here is the cost of care and shift of that cost to the consumer in a reimbursement model that is still largely fee-for-service. and whoever figures out how really get value — outcomes relative to spending — is going to win.

      “Hard as it might be, reducing health care’s burden on the economy while improving outcomes for employees and their families would be worth the effort”

      he says this as if that hasn’t been the topic of conversation since HillaryCare bombed. welcome to the party, jeff.

      the real way to control costs is someone has to say “no”
      and we’re not willing to do that. we tried that with HMOs and that wasn’t popular. so now it’s all care coordination and value. and that work. provided you have the data analytics and target interventions and a willing partner in a patient. i’ll have more to say on this.


      • Great points, Nova. I’ll say again, give Medicare patients cash to spend on whatever they like, say, 80% of the average payout per year and let the chips fall where they may. We can set up warehouses for palliative care for those that choose poorly. It’s the only thing that will drive costs down.

        Have to be willing to let grown adults suffer the consequences of their decisions.


  5. Overwrought.

    I pretty sure I noticed the ink on my screen was smeared from juicer’s tears.


    • I suspect the rest of his term will not be like the first, since the left will wear itself out as a sparring partner. It is hard to keep the outrage-o-meter pegged for long periods of time.


    • “Trump is making us a little more like him”

      Garbage. Anyone becoming “more like Trump” in order to “do battle” or whatever is making their own damned decisions. They are doing it. Trump’s not holding a gun to their heads.

      “Trump has largely outsourced his agenda to the congressional GOP and their allies inside his administration”

      Does it ever really work a different way?

      “Democrats are up by more than 7 percentage points in polls asking Americans whom they will support in the next congressional election.”

      Well, they should be happy. Why aren’t they happier?

      “His rule, his realization, is that you want as much coverage as possible, full stop. If it’s positive coverage, great. If it’s negative coverage, so be it. The point is that it’s coverage — that you’re the story, that you’re squeezing out your competitors, that you’re on people’s minds.”

      This is true for Trump, and the Trump’s of the world. Its not true for other people, and it’s a mistake for them to think it is.

      “In this, Trump either intuited or stumbled into a profound insight about the media: It’s easier to get bad press than good press. ”

      On what planet is that a profound insight? Is Ezra “Journo-list” Kline joking?

      “These are words that start wars, that drive deportations, that set policy, that end negotiations, that empower bigots, that reveal scandals,”

      How much of this has actually been done by Trump’s tweets?

      “This was, as so much is with Trump, an exercise that was simultaneously ridiculous and dangerous, comic and illiberal.”

      As opposed to creating an exclusive group of journalists where you can talk and try and set the media narrative and make sure you’re all on the same page when “massaging” the news? Was that “dangerous”?

      “I say none of this from atop a soapbox. I am as guilty of it as anyone, and more guilty of it than most.”


      “Some of it is an opportunity cost — there are so many other conversations we could be having,”

      Yeah, you’ve had all of history up to this point. Sorry you wasted that time, but that’s on you.

      “There are three years left in Trump’s term. It will not be good for the country if they all feel like Trump’s first.”

      You mean, the stock market going up and unemployment going down and everything being actually pretty good, so long as you don’t get engaged in the nonsensical Tweet-wars and political hyperbole? I’m okay with that.


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