Morning Report: Quiet week coming up

Vital Statistics:


Last Change
S&P futures 2732 10.5
Eurostoxx index 357.96 0.25
Oil (WTI) 56.54 0.08
10 year government bond yield 3.08%
30 year fixed rate mortgage 4.89%


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


We had a decent rally in the bond market last week, with the 10-year yield breaking 3.1% to the downside.


This should be a very quiet week coming up with the Thanksgiving Day holiday. The bond market will close early on Friday. There isn’t anything in the way of market-moving economic data, except for perhaps housing starts on Tuesday. We will also get existing home sales on Wednesday, along with the index of leading economic indicators. There will be some Fed-speak today, and the rest of the week is clear.


Industrial Production rose 0.1% in October, while Manufacturing production rose 0.3%. Capacity Utilization slipped a touch to 78.4%. Hurricane-related utility outages drove the lower IP number.


Larry Summers sees a 50/50 chance of a recession by 2020. “I think the risks if we have a recession are very, very serious so they [The Fed] need to bend over backward to avoid that,” he said. He thinks the Fed should probably err on the side of allowing inflation to build, and the fact it was so low for so long gives the Fed the breathing room to allow it to increase without unleashing an uncontrollable situation. He also thinks Trump should cut a deal with Democrats for an infrastructure spending package.


One strategist thinks it might be time to do some bottom-fishing in the homebuilding sector.

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