Morning Report: Some forecasts for 2020

Vital Statistics:

 

Last Change
S&P futures 3116 -1.25
Oil (WTI) 57.29 -0.24
10 year government bond yield 1.82%
30 year fixed rate mortgage 4.00%

 

Stocks are flattish this morning as violence continues in Hong Kong. Bonds and MBS are flat as well.

 

Optimism for a trade deal with China waxes and wanes, and we had some conflicting reports this weekend. CNBC said that the government was disappointed in Trump’s reluctance to roll back tariffs, while the Chinese state media company said Beijing and Washington had constructive talks over the weekend.

 

The upcoming week has some real-estate related data with housing starts and existing home sales, but nothing much market moving. We will get the FOMC minutes on Wednesday, but the sense in the market is that the Fed is on hold for a while, and probably through the election.

 

The Fed said the US financial system “appears resilient” in its semiannual report on financial stability. “The current combination of very low credit spreads and high levels of indebtedness among risky nonfinancial corporates, including through leveraged loans, merits heightened vigilance,” Fed Governor Lael Brainard said in a prepared statement. “Over the medium term, the low-for-long environment and the associated incentives to reach for yield and take on additional debt could increase financial vulnerabilities.” They were also critical of cryptocurrencies, warning they could destabilize the system if implemented without regulation and oversight. Wasn’t the whole point of cryptocurrencies to have a medium of exchange that is beyond the reach of governments?

 

Predictions for 2020:  Rates will remain low, with Fannie Mae predicting the 30 year fixed rate mortgage will end up in a tight range around 3.5% – 3.6%. Home price appreciation will re-accelerate, with home prices rising 5.6% next year versus 3.5% this year. Inventory will remain tight, however especially at the lower price points. “While historically low rates increase buying power and make it more likely for potential buyers to attain their homeownership dream, they also increase the risk of a long-run housing supply shortage, which we predict will continue through 2020 and possibly intensify,” Kushi says. “As first-time buyers lock-in these historically amazing rates and existing owners refinance—in droves in recent months, everyone will stay put and not sell. Where’s the incentive?”

24 Responses

  1. Not seeing a lot of poll results from impeachment. They must be bad for the democrats

    Like

    • We are at a level of tribal partisanship (and I think some of that is because of, as Jonah Goldberg points out, how week the parties have gotten over the years) that makes impeachment something that literally won’t move the needle.

      Whether Democrats impeach Republicans or Republicans impeach Democrats, it will won’t move the needle for most of the public, who will likely see such activities–which they are, inherently–as political tactics.

      From a strictly pedantic standpoint, I think “coup” may be a heavy-handed description. But these are “guerilla” tactics designed to keep the opposition stuck and always fighting and unable to make progress.

      Unfortunately, it always makes it tough for the side doing the impeachment to accomplish policy goals.

      I dunno. I think even most of the people excited about impeachment recognize that it’s politics and partisanship than it is about “saving the Republic”.

      But they should know–everyone should know–if judged objectively successful at achieving any political goal, it will be repeated. It will be trivial for Republicans to assert corruption with future Democratic presidents, and it’s very likely they’ll do it.

      Like

    • Over time, various schools won reputations for excellence, and with each passing year, their incoming classes grew whiter and wealthier.

      And more Asian, but they don’t keep hammering that point.

      “That’s unusual in a country where separate but equal is the primary education strategy.”

      This is not remotely true. In most places, it’s only as true as it’s geographically true. In Vermont public schools, most of the schools are white-dominated. Because it’s Vermont.

      They mention there has been no “white flight” but I didn’t see anything about Asian flight. They seem to invoke Asians when it’s convenient and then forget about them.

      Eh, good luck to them.

      Like

    • Chick-Fil-A caves to the mob.

      That’s highly disappointing.

      Like

      • And stupid. It’s not going to get them credibility with the people they are appeasing, most of whom are probably vegans anyway, and it’s just going to piss off the people who supported them.

        Like

        • This is expected. Of course they were going to cave. Just like almost everyone and everything does. If you want to be actively conservative and Christian, you either have to offer a lot of lip service (and tithing) the our true rulers, or hide it until it’s too late.

          Chick-Fil-A is a business and they are going to want to focus on the business, so as a collective they will keep surrendering to the mob in order to prevent the mob from constantly getting into their business.

          GLAAD won’t stop until Chick-Fil-A is completely beaten into submission. Once every store has a rainbow flag and employees ask you for your pronouns before you order, then maybe GLAAD will let up. Not until.

          Like

  2. I’m in a hotel this morning having breakfast and the TV was ABC and they switched to George Stephanopoulus, apparantly there are impeachment hearings today. Has anybody watched any of them to date and if so, what are your thought? I haven’t watched any though I have wanted to out of curiosity. Does my not knowing show my disinterest or has it not been covered by the media or what? Just didn’t seem to get the coverage that last week’s did. Am I wrong?

    Like

    • I find the dearth of stories about how impeachment is polling to be an indication that the whole thing is a bomb.

      Like

      • That’s a good point.

        Like

      • If they had saved up and put up a veneer of collegiality until they had this call, I think they could have really captured public attention and maybe made some real headway. But it’s been Orange Man Literally Hitler since before election day, much worse since, and keeping the volume at 11 (including talking about impeachment since before he was sworn in) makes this version of impeachment not that big of a deal. If people were given a list of personal and political issues and asked to rank them in number of importance, I suspect the impeachment would be near the bottom for almost all of them.

        Like

Be kind, show respect, and all will be right with the world.

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: