Morning Report: Happy New Year

Posted on January 2, 2024 by Brent Nyitray

Vital Statistics:

Stocks are lower as we begin 2024. Bonds and MBS are down.

Happy new year. Here’s hoping 2024 begins the rebound in the mortgage business.

The upcoming short week will be dominated by the jobs report, however we will also get the FOMC minutes from the December meeting. On Friday, we will get the ISM Manufacturing Index as well.

There is a Groundhog Day feeling to the beginning of the year, with people calling for a recession after the Fed’s rate hikes. So far, the optimists have been right, and that has been primarily due to the unexpected resilience of the US labor market, especially at the lower wage end.

In early 2024, the full lagged effects of the 2022-2023 rate hiking cycle will be fully felt. Historically, a 525 basis point tightening regime would have caused a severe recession, but perhaps the sheer unprecedented amount of fiscal stimulation during the pandemic years and beyond was able to soften the blow.

Theoretically the Fed should focus solely on inflation and unemployment, however theory and practice don’t always mix. I discussed the politics of the moment and what it means for the Fed in my latest Substack.

US manufacturing weakened in December, according to the S&P Purchasing Managers Index. “US manufacturers ended the year on a sour note, according to S&P Global’s PMI survey. Output fell at the fastest rate for six months as the recent order book decline intensified. Manufacturing will therefore likely have acted as a drag on the economy in the fourth quarter. The slowdown is spreading to the labor market. Payrolls were cut for a third month running as increasing numbers of firms grew concerned about the development of excess operating capacity. The fourth quarter has consequently seen factories reduce employment at a pace not seen since 2009 barring only the early pandemic lockdown months.

Apartment rental rates are expected to continue to soften in 2024. Rents rose about 20% between 2021 and 2022, however they were flattish in 2023. We currently have a record number of multi-family units under construction, so rental growth should continue to be flat to negative. Most of these units are expected to open in the next 12 months, so we will have a deluge of new units, especially in markets like Nashville, Austin, Dallas and Atlanta.

Filed under: Economy |

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26 Responses

  1. jnc4p's avatar
    jnc4p, on January 2, 2024 at 1:44 pm said:

    Apparently Hamas itself won’t be sued, even though I do believe that they have assets that could be seized.

    “Nova festival survivors and relatives file lawsuit against Israeli agencies

    By Lior Soroka”

    https://www.washingtonpost.com/world/2024/01/02/israel-hamas-war-gaza-news-updates/#link-EW75KD3YPRFHNAPIHPQLLSX4P4

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  2. jnc4p's avatar
    jnc4p, on January 2, 2024 at 4:46 pm said:

    Good read:

    “Bill Barr: I Oppose Trump—and Any Efforts to Ban Him From the Ballot

    The 2024 election will pose the gravest of challenges to our institutions. Unconstitutional measures will take us down far more dangerous channels.

    By William P. Barr

    January 2, 2024”

    https://www.thefp.com/p/bill-barr-banning-trump-from-the

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  4. Let the mutherfuker burn!'s avatar
    Let the mutherfuker burn!, on January 2, 2024 at 9:24 pm said:

    How can you not absolutely love this!

    https://x.com/johnjharwood/status/1742336829683335340?s=46&t=vSGsUlnc4rLxcUf7zfUiHg

    How dare you expect me to adhere to standards!

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  5. jnc4p's avatar
    jnc4p, on January 3, 2024 at 1:05 pm said:

    George:

    “Va. attorney general moves to drop last charge in election corruption case
    Prince William County’s former top election official had been accused of corruption, lying and failing to do her job during the 2020 election

    By Justin Jouvenal
    January 3, 2024 at 7:00 a.m. EST”

    https://www.washingtonpost.com/dc-md-va/2024/01/03/michele-white-prince-william-charge-election-fraud/

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  6. jnc4p's avatar
    jnc4p, on January 3, 2024 at 1:16 pm said:

    Also George, looks like Rufo is the heir to Breitbart, Bannon & O’Keefe:

    https://www.politico.com/news/magazine/2024/01/03/christopher-rufo-claudine-gay-harvard-resignation-00133618

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  7. jnc4p's avatar
    jnc4p, on January 3, 2024 at 1:35 pm said:

    Sounds like kidnapping or human trafficking to me. Wasn’t that what they accused DeSantis of?

    “New Jersey’s nascent role in the migrant bussing situation has drawn backlash from the top official in one of the state’s largest municipalities. Edison Mayor Sam Joshi, a Democrat, said in an interview that “we’re not going to have migrants stay in Edison.”

    Joshi said that migrants sent to his town — where nearly 45 percent of the population is foreign born, according to U.S. Census figures — could be bussed back to the southern border. It was unclear what the cost of the busing would be.

    “We have directed our emergency management to have a charter bus on standby if necessary to send the migrants back to the southern border,” he said. “The migrants need to be vetted through customs, they need to go through the legal process. That’s my position.””

    https://www.politico.com/news/2024/01/03/migrant-drop-offs-in-n-j-and-chicago-escalate-border-wars-heading-into-2024-00133554

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    • Kevin S. Willis's avatar
      Kevin S. Willis, on January 6, 2024 at 11:02 am said:

      All these discussions leave out how many migrants the Biden admin is flying to do different areas of the country which, as I understand it, dwarfs whatever DeSantis or Abbott has done. But that’s not a problem because Democrats.

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      • jnc4p's avatar
        jnc4p, on January 6, 2024 at 11:12 am said:

        Everyone knows it’s BS. But Abbot was exactly right in his political tactics in how he’s forcing the local Democrats to take anti-immigrant positions publicly as a response to this.

        “Separately, New York City has paid to transport asylum seekers to destinations outside the city. Between March and November, the city spent about $4.6 million to purchase more than 19,300 plane tickets for migrants seeking travel to other cities. A spokesperson for Adams claimed Abbott’s actions differ from the mayor’s because the Texas governor’s program offers migrants little access to food, water and bathrooms and because the mayor’s ticketing process intends to get migrants to their preferred destinations.

        The governments of both Texas and New York City say the migrants are traveling willingly.”

        https://www.politico.com/news/2024/01/04/adams-sues-texas-bus-companies-00133869

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  8. Let the mutherfuker burn!'s avatar
    Let the mutherfuker burn!, on January 3, 2024 at 1:38 pm said:

    I had no idea that academia, particularly Ivy League academia was so rife with white supremacy.

    https://x.com/lisafordenver/status/1742569254484865514?s=46&t=vSGsUlnc4rLxcUf7zfUiHg

    They need to be deprived of govt funding until they are purged of ALL whiteness. No money while even one white person is employed or is a student.

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  10. Let the mutherfuker burn!'s avatar
    Let the mutherfuker burn!, on January 3, 2024 at 8:50 pm said:

    Go with the red lighting again, and the uniformed men in silhouette flanking you.

    https://x.com/nbcnews/status/1742523755803312246?s=46&t=vSGsUlnc4rLxcUf7zfUiHg

    Very powerful imaging the last time.

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  11. Let the mutherfuker burn!'s avatar
    Let the mutherfuker burn!, on January 3, 2024 at 10:17 pm said:

    Funny!

    https://x.com/a_newsman/status/1742702431031718224?s=46&t=vSGsUlnc4rLxcUf7zfUiHg

    We need to shut this all down until we figure out what the hell is going on.

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  12. jnc4p's avatar
    jnc4p, on January 4, 2024 at 8:25 am said:

    Even Russia and China would be impressed by a conviction/plea rate this high:

    “The Jan. 6 Riot Inquiry So Far: Three Years, Hundreds of Prison Sentences

    By Alan Feuer and Molly Cook Escobar
    Jan. 3, 2024

    Nearly three years after a mob attacked the Capitol on Jan. 6, 2021, in support of former President Donald J. Trump, the criminal investigation into the events of that day pushes on.

    Prosecutors have called the riot inquiry the largest in the history of the Justice Department, and there is no doubt it is vast by any measure.

    Every week, a few more people are arrested.

    As of December, about 1,240 people had been arrested in connection with the attack, accused of crimes ranging from trespassing, a misdemeanor, to seditious conspiracy, a felony.

    More than 350 cases are still pending.

    Around 170 people have been convicted at trial, while only two people have been fully acquitted. Approximately 710 people have pleaded guilty and among those, around 210 pleaded guilty to felony offenses.

    After being convicted or pleading guilty, more than 720 people have received sentences so far and more than 450 of them were sentenced to periods of incarceration, ranging from a handful of days to more than 20 years.

    And while there have been about 1,240 arrests as of early December that may be only half of the total indictments that will ultimately be filed.”

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