Morning Report: Inflation remains under control 5/10/18

Vital Statistics:

Last Change
S&P futures 2705 8.75
Eurostoxx index 391.2 -1.24
Oil (WTI) 71.51 0.37
10 Year Government Bond Yield 2.96%
30 Year fixed rate mortgage 4.62%

Stocks are breathing a sigh of relief after the Consumer Price Index comes in lower than expectations. Bonds and MBS are up as well.

The headline Consumer Price Index rose 0.2% MOM / 2.5% YOY. Ex-food and energy it rose 0.1% / 2.1%. Higher gasoline prices pushed the index up, while falling healthcare and communications price increases pulled it lower. While the Fed focuses on PCE, and not CPI it is a welcome development for bonds and shows that the 3% level has held again on the 10-year.

Initial Jobless Claims were flat last week at 211,000. For those keeping score at home, this is pretty much a 48 year low.

Royal Bank of Scotland will finally put the mortgage crisis behind it as it settles with the US government with a $4.9 billion fine. The fine was lower than expected and the stock is up 6% this morning in UK trading.

Want to get the absolute best price for your home? List it on Tuesday at 5:00 pm local time. No, really.

California is close to mandating that all new homes come with solar panels. The mandate will probably raise the cost of a new home by about $10,000 although the money will eventually get recouped with lower energy bills – the CA Energy Commission estimates that the typical homeowner will save $80 a month, which would more than offset the $40 additional mortgage cost. CA’s average electric bill is only $90 a month to begin with, so that $80 number seems suspect.

The White House is looking to keep Interim BCFP Director Mick Mulvaney in for a longer period, at least through the end of the year. The WH is rumored to want NCUA Chairman Mark McWatters as the permanent head of the CFPB. McWatters is viewed as a pragmatist and has a reputation for working with people on both sides of the aisle.

10 Responses

  1. Interesting piece. Maybe the future is libertarian after all.

    https://www.weeklystandard.com/shapiro-win-back-young-americans

    Like

    • it’s always the future. never the now.

      Like

      • You’ll need an economy more geared towards business start ups and entrepreneurship.

        The aftermath of the financial crisis and the job market really is driving the support for socialism for millennials.

        Edit: That may be necessary, but not sufficient. You’ll also need a Republican or Libertarian party that’s not an embarrassment and a national political figure comparable to Reagan or Obama to set the attitude of a generation.

        Like

        • The thing is, the overwhelming majority of people have always been (and will always be) drones, not entrepreneurs, you can’t educate that aspect of human nature away.

          That’s a downside of globalization, drone jobs will eventually go where the labor is cheapest (given adequate infrastructure and low energy costs for shipping). What do we do with our drones then?

          Like

  2. I’d hit it.

    Like

  3. Gotta love Ace’s headline.

    http://acecomments.mu.nu/?post=375204

    “Spacehomos” snicker.

    Like

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