Morning Report: Another eviction ban

Vital Statistics:

  Last Change
S&P futures 4,403 7.2
Oil (WTI) 68.24 -1.25
10 year government bond yield   1.2%
30 year fixed rate mortgage   2.96%

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

 

Initial Jobless Claims came in at 385,000, which was a touch above expectations. Separately, the Challenger Gray and Christmas job cut report showed 18,942 announced job cuts.

 

Despite a Supreme Court ruling that the CDC’s eviction ban is unconstitutional, the Biden Admin ordered another one to last until October 3. I think they tweaked it a little, so if you make under 200k, you can’t get evicted. Despite this change it will still cover about 90% of renters. FWIW, the Biden Admin admitted earlier it couldn’t really pull this stunt, but I guess the pressure from the backbenchers got to be too much.

 

Fed Vice Chairman Richard Clarida could see the Central Bank start raising rates in 2023. He didn’t give a timeframe on the issue of MBS and Treasury purchases, only saying that the market would have plenty of notice before they start.

The Fed Funds futures envision a more hawkish scenario, with the market assigning a 60% chance of rate hikes by the end of 2022.

 

While the job market still has more work to do in order to get back to full employment, inflation is running above the Fed’s 2% target. COVID-19 related supply chain bottlenecks are probably behind it, but wage growth may be the next shoe to drop and that will be more persistent boost to inflation than a lack of logistics space on I-95.

 

Loan Depot reported lower-than-expected earnings, as competitive pressure and overcapacity pressured margins. Volumes decreased 17% to $34.5 billion and gain on sale margins fell to 2.28% from 2.98% in the first quarter. On a YOY basis, gain on sale margins are down 58%.

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