Vital Statistics:
| Last | Change | |
| S&P futures | 3839 | 5.3 |
| Oil (WTI) | 52.10 | 0.14 |
| 10 year government bond yield | 1.07% | |
| 30 year fixed rate mortgage | 2.83% |
Stocks are flattish this morning as earnings continue to come in. Bonds and MBS are up.
We have a big week of data coming up, along with the FOMC meeting. In terms of data, we will get home prices tomorrow, the FOMC decision on Wednesday, fourth quarter GDP on Thursday, and personal incomes / spending on Friday. The Fed meeting should be uneventful given Jerome Powell’s “now is not the time” language, referring to scaling back bond purchases.
Existing Home Sales rose 0.7% in December to a seasonally-adjusted annual rate of 5.64 million, according to the National Association of Realtors. This is the fastest pace since 2006. “Home sales rose in December, and for 2020 as a whole, we saw sales perform at their highest levels since 2006, despite the pandemic,” said Lawrence Yun, NAR’s chief economist. “What’s even better is that this momentum is likely to carry into the new year, with more buyers expected to enter the market.” I think Yun is right there – all signs point to an exceptionally strong Spring Selling Season, which is right around the corner. FWIW, NAR sees mortgage rates hovering around 3% in 2021, which is low enough for the refinance party to continue.
Total inventory fell to 1.07 million units, which is a 23% drop from a year ago, and represents under a two month supply of homes. This is the lowest amount since 1982, when NAR first started compiling these statistics. Tight inventory means higher prices, and the median home price was up 13% YOY to $309,800. With home prices rising affordability remains a concern, and I think the Fed is going to take that into account and hold down rates as long as it can.
Housing starts are rising, which should help alleviate the shortage, however it will take a couple years at least to get back to some semblance of balance. Housing construction should be great for the economy, and we could be looking at some strong performance between the stimulus and housing once the COVID crisis is out of the way. That said, one in three small businesses have shut over the past year, and that will be a drag.
The mortgage IPOs keep coming. United Wholesale completed its merger with a SPAC, and now Home Point is filing to go public. Loan Depot is another candidate.
The regulatory state is mulling whether to extend the Community Reinvestment Act to non-banks.
Filed under: Economy, Morning Report |
All Things in Moderation 
Brent…you may be interested in this article, if you haven’t dropped google already.
https://thefederalist.com/2021/01/25/how-to-stop-using-google-search-on-your-computer-and-phone/
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I’ve been changing over to DuckDuckGo. Google remains fine and even superior when searching for technical stuff or parts or products or specific people or movies, but anything political it just de-ranks anything from anything remotely conservative if there’s any other plausible option. Meaning I can go to duckduckgo and find what I’m looking for with a simple search, or I can find it at google if I search specifically, word for word, a specific headline or something I already know–then Gateway Pundit or Daily Wire will come up. Stupid Google.
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The fate of Buy American? A summary from The Economist:
Steel yourself: Joe Biden’s “Buy American” push
The flurry of executive orders from the Biden administration will continue today. One will attempt to deliver on a key campaign promise: to direct government spending towards American jobs. Donald Trump signed no fewer than ten executive orders on the topic while president. But he also faced similar constraints. Some products simply are not made in America; that takes more than a presidential signature to change. Much federal spending is covered by deals such as the Government Procurement Agreement, an international pact to open up government contracts, originally pioneered by America. If Mr Biden wants to backtrack on that commitment, other members will close off their own markets, too. The president could try to attach strings to federal spending at the state and local level, where most government procurement dollars end up. But that could prompt howls from trading partners, project delays and greater expense. A promise is a promise. But it won’t come cheap.
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Depressing fact of the day: Fauci is now the highest paid federal employee in the US.
https://thefederalist.com/2021/01/25/dr-anthony-fauci-is-the-highest-paid-federal-employee/
This got me to thinking about a few propositions:
1) The term “public service” should never be used in regard to any government job that pays more than the average US salary.
2) It should be federal law that the average salary across all federal employees cannot exceed the average salary of the nation as a whole in the previous year.
3) All federal or state employees who imposed, voted for, or recommended business closures during the Corona pandemic should by law have to forgo their own salary for as long as the resulting closures are in place. It is a moral imperative that such people live under the same conditions that they are imposing on others.
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Ouch
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This.Is.Awesome!!!
https://www.breitbart.com/clips/2021/01/24/maxine-waters-trump-will-take-over-legislatures-little-towns-and-cities-if-not-convicted-for-insurrection/
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WTF is wrong with these people. And impeaching him would not prevent him from engaging activism to “take over” in state legislature or whatever his sinister plan might be.
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KW:
And impeaching him would not prevent him from engaging activism to “take over” in state legislature or whatever his sinister plan might be.
Maybe, but after 4 torturous years of Trump’s divisiveness, isn’t this kind of unifying event exactly what we need?
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It reminds how I felt over Clinton’s impeachment after Republicans swept the house in 94–only far more compressed. A little progressive Contract on America with the EOs and a pointless impeachment … at the same time now!
It’s all just ridiculous. The people who are celebrating like all the problems were Trump and now everything is “mature and rational” are just deluding themselves.
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lol! Mitt Romney quoted so well!
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If the left wants to burn political capital on impeaching an ex-president, so be it.
I can think of less harmless things they can do.
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Brent:
I can think of less harmless things they can do.
They’ll eventually get around to those too.
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They’ll eventually get around to those too.
Perhaps, but it will get progressively harder to do anything.
I suspect they will overreach on the stimulus plan and that will end anything legislative for this session. Certainly no tax hikes.
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