Morning Report: Quiet week ahead

Vital Statistics:

  Last Change
S&P futures 4,555 -55.2
Oil (WTI) 67.97 -2.88
10 year government bond yield   1.39%
30 year fixed rate mortgage   3.30%

Stocks are lower this morning on COVID lockdown fears. Bonds and MBS are up small.


The upcoming week should be relatively quiet, especially with Christmas Eve on Friday. In terms of economic data, we will get the third revision to Q3 GDP on Wednesday and Personal Incomes / Spending on Thursday. Markets are closed on Friday.


The Index of Leading Economic Indicators increased in November, according to the Conference Board. “Eight of the ten indicators that comprise The Conference Board LEI for the U.S. increased in November. The positive contributors – beginning with the largest positive contributor – were average weekly initial claims for unemployment insurance (inverted), stock prices, the interest rate spread, the ISM® New Orders Index, building permits, the Leading Credit Index™ (inverted), average weekly manufacturing hours, manufacturers’ new orders for consumer goods and materials*. The only negative contributor was average consumer expectations for business conditions, while the manufacturers’ new orders for nondefense capital goods excluding aircraft* held steady in November.”


Joe Manchin is a no on the Build Back Better bill. It should be a non-event economically, though it does give the Fed a little more breathing room.


Rents are rising rapidly, in tandem with higher home prices. “First inflation came for the for-sale housing market, and now it is coming for the rental market,” said Redfin Chief Economist Daryl Fairweather. “Many people have been priced out of the for-sale market and are looking to rent instead, but that demand is pushing up rents. Anyone who bought a home before this year can pat themselves on the back because their mortgage payments are fixed, meaning their biggest recurring expense is immune to inflation. If you are looking to buy or rent now, there’s nowhere to hide from inflation when it comes to housing costs. The good news is that the tight labor market means it’s a great time to move somewhere more affordable. Chances are good that no matter where you go, you’ll be able to find a new job relatively quickly.”




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