Morning Report: Dovish FOMC minutes

Vital Statistics:


Last Change
S&P futures 2835.25 -22.4
Oil (WTI) 60.47 -0.95
10 year government bond yield 2.36%
30 year fixed rate mortgage 4.41%


Stocks are lower this morning on trade fears and European elections. Bonds and MBS are up.


The minutes from the April FOMC meeting were released yesterday, and the Fed continues to adjust its sails to the messages from the market. The bond market took the minutes to be dovish, and bond yields dropped after they were released. The quote that investors focused on:


“Members observed that a patient approach to determining future adjustments to the target range for the federal funds rate would likely remain appropriate for some
time, especially in an environment of moderate economic growth and muted inflation pressures, even if global economic and financial conditions continued to improve.”


That statement (even if global economic and financial conditions continued to improve) is an all-clear signal to the bond market that positive economic data is no longer a threat. Given the background of creeping Eurosclerosis and a trade dispute, the highs for interest rates are probably in, and strategists are already talking about an insurance rate cut.


Talk of a rate cut is probably premature however. The data just don’t support it, and with the jawboning out of the White House the Fed is going to resist cutting rates if only to prove they are independent. That said, the circumstances required to justify a rate hike are even more unlikely.


Troubles in the luxury end of the real estate market? Not so fast. McMansion builder Toll reported earnings yesterday that exceeded street expectations, and Toll CEO Doug Yearley noted that the Spring Selling Season, which had been a bit of a disappointment, has finally woken up. “We are encouraged by the improvement in demand as the quarter progressed.  FY 2019’s April contracts surpassed FY 2018’s April on both a gross and per-community basis.  Although the Spring selling season bloomed late, it built momentum.  We view this as a positive sign for the overall health of the new home market.”


Initial Jobless Claims ticked up to 215,000 last week, while the Markit purchasing managers’ index decreased in April.


New home sales ticked down in April, falling to a seasonally adjusted annual pace of 673,000. That said, March’s numbers were revised upwards to 732,000. The median home price was more or less flat YOY at $326,400 and the inventory of 332,000 units represents a 5.9 month supply.

21 Responses

  1. If this is accurate at all, Episode IX may suck worse than the previous two.
    It’s now being used as a vehicle to tell how millennials were screwed over by previous generations.

    “The new generation doesn’t have that same connection to the old days that Luke and Leia did. It’s not like their parents destroyed the Old Republic. We don’t even know who their parents were! They’re too young to remember the Empire. They’re just here to clean up the mess they got left with, the disastrous consequences of bad decisions made by earlier generations, and try to survive long enough to see the future. Is any of this resonating with 2019?”

    Liked by 1 person

    • i’m looking forward to the Mandalorian show on the new Disney steaming service.


    • Aslo, i don’t even know that i’d consider star wars science fiction.


    • It will be hard to be worse than TLJ, IMO. Force Awakens was what I expected—a mediocre rehash, watchable but not great. TLJ actively hated the fans, hated Star Wars geeks, and also apparently hated telling a coherent story or making any fucking sense. Worth watching primarily for Hamill’s performance. Ridley and Driver were excellent as well. If only they had had character arcs and earned character moments. But still … it was awful.

      I enjoyed CinemaWins Everything Great About the Last Jedi but I still hate the movie and Rey is a Mary Sue—she’s the very definition of a Mary Sue—and it just comes off awful. If JJ can deliver a conclusion as mediocre as TFA he will have improved on the series after TLJ immensely.

      I take the comparisons to contemporary politics with a grain of salt. Ultimately TLJ didn’t suck because if wokeness, it sucked because Rian took a big steaming dump on the franchise. If Abrams avoids doing that it will be an improvement. Even so, I’m not seeing this in the theater. Not after spending $100 to get abused by TLJ.


  2. Does being to warm fuck up men’s productivity?

    Liked by 1 person

  3. Guess we’re back to thinking that transparency is bad.


    • Transparency is bad when it reveals the enlightened plans and plots of progressives that the hoipoloi is too immature and too uneducated to understand. It would just confuse them.

      Transparency is good if it exposes conservatives and Republicans and Christians and any one right of center as the tax-cheating, Russian-colluding Nazis they are. THAT is something we can trust the hoipoloi to understand.


    • I don’t recall them calling it Death Ridge when it’s like that here every July and August. And the temps are close to this in May by a few degrees, and I don’t recall them calling that a death Ridge when I was a kid and the schools weren’t air conditioned and lots of place were far less air conditioned than today.



    Not sure if that link will work. It’s about the Nevada legislature being majority female. And they are still bitching.

    Because nothing will ever be enough. Surprise!


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