Morning Report: IMB production profit falls to a series low

Vital Statistics:

S&P futures4,108-23.5
Oil (WTI)79.93-0.85
10 year government bond yield 3.38%
30 year fixed rate mortgage 6.26%

Stocks are lower this morning as they react to Friday’s jobs report. Bonds and MBS are down. Volumes are light overall as many European markets are closed today.

The main event this week will be the consumer price index on Wednesday. The Street is looking for a 0.3 MOM / 5.2% YOY gain in the headline number. It sees the core rate (ex-food and energy) rising 0.4% MOM and 5.3% YOY.

Earnings season kicks off on Friday with a lot of the big mega-banks reporting. The regional banks will be under the microscope and the issue of deposits will loom large, though concerns in the commercial real estate sector (especially office properties) will be a focus as well.

The calendar will be somewhat light on Fed-speak as well.

The Fed Funds futures turned a bit more hawkish after Friday’s jobs report, with the May contracts now seeing a 70% chance for a rate hike, which would take the rate to 5%. So far, that seems to be the peak and the end-of-year contracts see the Fed Funds rate at 4.25%.

I discussed Friday’s jobs report in this week’s Substack piece. Check it out and please consider subscribing. The report wasn’t all bad news for the Fed – in fact there were some positive things in that report.

The Atlanta Fed’s GDP Now tracker sees Q1 GDP coming in at 1.5%. This is a pretty hefty decelerations after the banking crisis began.

Net production income for independent mortgage bankers fell to a $301 loss, according to the MBA. This is a series low for the index, which began in 2008.

“For the first time since the inception of MBA’s report in 2008, net production income was in the red in 2022, with losses averaging 13 basis points. The rapid rise in mortgage rates over a relatively short period of time, combined with extremely low housing inventory and affordability challenges, meant that both purchase and refinance volume plummeted,” said Marina Walsh, CMB, MBA’s Vice President of Industry Analysis. “The stellar profits of the previous two years dissipated because of the confluence of declining volume, lower revenues, and higher costs per loan.”

Added Walsh, “Production revenues declined in 2022, but the bigger story was that production expenses ballooned to a study high of $10,624 per loan. Companies could not adjust their capacity fast enough. The number of production employees declined, but not at the same pace as origination volume. As a result, productivity in 2022 fell to a low of 1.5 closed loans a month per production employee.”

15 Responses

  1. Up to 50 informants/under covers embedded with the Proud Boys on Jan 6, probably more in fact.

    If there was a plan how did these ‘tards miss it?

    Just don’t call it a Fedsurrection.


  2. In all sincerity, why not?


    • Thou Shalt Not Print Anything that makes the Party look bad.

      The pusillanimous stenographers will obey.


      • Greenwald pointed out how far the NYT and Washington Post have fallen when they recommend prosecution of their own sources, i.e. Snowden, for leaks that won them the Pulitzer prize.


  3. Fascinating clip, if only to learn that Buckley didn’t learn English until he was six.


  4. I thought this was interesting!

    Manhattan District Attorney Alvin Bragg has charged Trump with falsifying business records.
    House Judiciary chair Jim Jordan is holding a field hearing in New York to try and shame Bragg.
    A Bragg aide said Jordan could more effectively crack down on crime by looking at murders in Ohio.

    An aide to Manhattan District Attorney Alvin Bragg said House Judiciary Committee chair Jim Jordan would better serve the public by investigating homicides in his own backyard than road tripping to New York City for a field hearing on violent crime.

    Jordan, one of the many House Republicans outraged by Bragg’s indictment of embattled former President Donald Trump, has decided to take the brewing fight to Bragg’s home turf by interviewing unspecified witnesses at a just-announced hearing in Manhattan on April 17.

    A Bragg spokesman called the pending congressional visit a political stunt, telling Bloomberg News that murders in New York City were three times lower than the murder rate in Columbus, Ohio.

    If Chairman Jordan truly cared about public safety, he could take a short drive to Columbus, Dayton, Cincinnati, Cleveland, Akron, or Toledo, in his home state, instead of using taxpayer dollars to travel hundreds of miles out of his way,” the Bragg aide said.

    Columbus, which has a population of approximately 907,000 people, closed out 2022 with 140 murders, according to The Columbus Dispatch, or 15.4 murders per 100,000 citizens.

    New York City, which has a population of roughly 8.4 million, closed out 2022 with 433 murders, the Wall Street Journal reported, for a murder rate of 5.2 murders per 100,000 citizens.


    • What is interesting? A butthurt leftist calling out critics is utterly banal


    • “A Bragg spokesman called the pending congressional visit a political stunt”

      Yep. Just like Bragg’s indictment of Trump in the first place.

      BS all the way down.


  5. RIP Boeing.


  6. Notice how it doesn’t say it will start monitoring, only that it will change how it monitors.


  7. We will spend our last dollar helping Ukraine…

    remain one of the two most corrupt countries on earth!


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

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

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

Facebook photo

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

Connecting to %s

%d bloggers like this: