Vital Statistics: Stocks are higher as investors like Tesla’s numbers. Bonds and MBS are down. New Home Sales rose 8.8% MOM in March to a seasonally adjusted annual rate of 693,000. This is up 8.3% on a year-over-year basis. The median new home price fell 2% on a YOY basis to $430,700. There is an 8.3 month supply of homes for sale. Pulte reported earnings per share that rose 32% compared to a year ago. Revenues rose 10% to $3.8 billion. Gross margins expanded 50 basis points YOY to 30%. CEO Ryan Marshall said this on the earnings conference call: Against generally favorable demand condition ..read more

Vital Statistics: Stocks are higher this morning as earnings continue to come in. Bonds and MBS are down. Mortgage REIT AGNC Investment reported earnings last night. Mortgage REITs are often the buyer of mortgage banking production, so it is useful to understand how they see the world. “AGNC generated an economic return of 5.7% in the first quarter of 2024, as the favorable macroeconomic environment for fixed income investors that began in late 2023 persisted throughout the first quarter of 2024” said Peter Federico, the Company’s President and Chief Executive Officer. “Particularly bene ..read more

Vital Statistics: Stocks are higher this morning after a rough week. Bonds and MBS are down. The big event this week will be the Personal Incomes and Outlays number on Friday, which will include the Personal Consumption Expenditures Price Index, which is the Fed’s preferred inflation measure. We will also get new home sales and the first estimate for Q1 GDP. Chicago Fed President Austan Goolsbee said the Fed is on hold as progress on inflation has stalled out. “Given the strength of the labor market and progress on easing inflation seen over a longer arc, I believe the Fed’s current restricti ..read more

Vital Statistics: Stocks are lower this morning as tensions between Israel and Iran continue to simmer. Bonds and MBS are flat. Existing Home Sales fell 4.3% in March to a seasonally adjusted annual rate of 4.19 million. This is down 3.7% on a year-over-year basis. “Though rebounding from cyclical lows, home sales are stuck because interest rates have not made any major moves,” said NAR Chief Economist Lawrence Yun. “There are nearly six million more jobs now compared to pre-COVID highs, which suggests more aspiring home buyers exist in the market.” On the bright side, inventory is increasing ..read more

Vital Statistics: Stocks are higher this morning on no real news. Bonds and MBS are up for once. The Fed Beige Book didn’t give the indication of an economy growing at a rip-roaring pace. In fact, it almost seemed to contradict what we have been hearing from Fed speakers – that activity remains robust, that wages are increasing, and inflation remains persistent. Overall economic activity expanded slightly, on balance, since late February. Ten out of twelve Districts experienced either slight or modest economic growth—up from eight in the previous report, while the other two reported no chang ..read more

Vital Statistics: Stocks are rebounding this morning after hawkish comments from Jerome Powell yesterday. Bonds and MBS are stabilizing. Jerome Powell pulled the rug out under bond bulls yesterday by acknowledging that inflation is too high and hinting that rate cuts are not coming any time soon. Punch line: Stick a fork in the June rate cut bet. “The labor market remains very strong” as the unemployment rate remains under 4% for the longest period in more than half a century, Federal Reserve Chair Jerome Powell said on Tuesday. Even with this strength the labor market has been moving into b ..read more

Vital Statistics: Stocks are higher this morning despite an attack on Israel from Iran over the weekend. Bonds and MBS are down. The expected reaction in markets to the Iran / Israel situation is not happening: oil is down, bonds are down, and stocks are up. It sounds like de-escalation is the story markets are focusing on. The White House is telling Israel not to retaliate. The week ahead will have some important housing data, but little that should move the bond market. Earnings season begins in earnest this week and we will also have quite a bit of Fed-speak. Retail sales rose 0.7% month-o ..read more

Vital Statistics: Stocks are lower this morning as earnings season kicks off. Bonds and MBS are up for once. JP Morgan reported earnings per share of of $4.44 which was an increase of 8% compared to the first quarter and 46% compared to a year ago. Charge-offs increased to $1.9 billion. Mortgage origination volume fell 8% compared to Q4 and 16% year-over-year to $6.6 billion. “Many economic indicators continue to be favorable. However, looking ahead, we remain alert to a number of significant uncertain forces. First, the global landscape is unsettling – terrible wars and violence continue to ..read more

Vital Statistics: Stocks are flattish after another inflation gauge came in hot. Bonds and MBS are down. Inflation at the wholesale level rose 0.2% in March and 2.1% YOY, according to the Producer Price Index. If you strip out food and energy, the index rose 0.2% month-over-month and 2.4% year-over-year. While not a disaster like the CPI report yesterday, it isn’t helping the cause, and the 10 year is getting smoked again. The FOMC minutes from the March meeting did indicate rate cuts were in the near future. While they did note that there might be some seasonality involved with the inflation ..read more

Vital Statistics: Stocks are higher this morning as we await the CPI report tomorrow. Bonds and MBS are up after yields hit a 2024 high yesterday. Small business optimism fell 0.8% to the lowest level since December 2012. Sales expectations are weakening, and a tight labor market continues to be a problem. Compensation continues to increase, albeit at a slower pace. “The small business sector is showing signs of a potential slowdown in economic activity with net sales expectations falling 8 points, the main contributor to the decline in last month’s Index. However, continued stress in navigat ..read more