Morning Report: Q1 GDP estimate 1.5%

Posted on April 4, 2022 by Brent Nyitray

Vital Statistics:

 LastChange
S&P futures4,5412.2
Oil (WTI)102.243.09
10 year government bond yield 2.38%
30 year fixed rate mortgage 4.86%

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

The upcoming week is relatively-data light, with the ISM Services Index about the only meaningful report. We do have a smattering of Fed-speak though and the minutes from the March FOMC meeting on Wednesday. Investors will be looking at the minutes for insight into how the Fed plans to reduce the size of its MBS holdings. This has been the dark cloud over the MBS market as MBS spreads have widened considerably over the past month.

FHFA Director Sandra Thompson said “We’re preparing the enterprises to adjust to supervision in a way that they would be regulated outside of conservatorship,” Thompson said. “The safety and soundness of the enterprises, making sure their operations are really in tip-top condition — which they are — making sure their financial condition is as expected and that they never have to rely on the federal government again, [are] really important.”

Construction spending rose 0.5% MOM and 11.2% YOY, according to Census. Residential construction rose 1.1% MOM and 16.5% YOY. Labor and materials shortages continue to bedevil the residential construction industry.

With Q1 in the books, the Atlanta Fed’s GDP Now estimate came in 1.5% as of April 1.

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