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

Vital Statistics: Stocks are lower this morning as interest rates continue to rise. Bonds and MBS are down. The upcoming week will have important inflation data with the consumer price index and the producer price index. Earnings season also kicks off this week with the big banks reporting on Friday. The Fed-speak lately has been pretty hawkish, and the sentiment for rate cuts seems to be fading fast. One Fed official raised the possibility of rate hikes if inflation doesn’t continue to work its way lower. The June Fed Funds futures now see roughly a 50-50 chance of a cut, and the December fu ..read more

Vital Statistics: Stocks are higher this morning after the strong jobs report. Bonds and MBS are down. The economy added 303,000 jobs last month, according to the Employment Situation Report. This was an increase from the downwardly-revised February number of 270,000. Unlike February’s number, these jobs were not statistical adjustments – the number of people actually employed increased by almost 500k. The unemployment rate ticked down from 3.9% to 3.8%, while average hourly earnings increased 0.3% MOM and 4.1% YOY. The labor force participation rate increased from 62.5% to 62.7%. The employm ..read more

Vital Statistics: Stocks are higher this morning as we await a total of 5 Fed speakers. Bonds and MBS are up small. Jerome Powell spoke yesterday on monetary policy, which didn’t really break any new ground compared to his press conference after the March FOMC meeting. He acknowledged the high PCE print last Friday, and said that some “bumpiness” on the road to 2% inflation is to be expected. The recent data do not, however, materially change the overall picture, which continues to be one of solid growth, a strong but rebalancing labor market, and inflation moving down toward 2 percent on a ..read more

Vital Statistics: Stocks are lower this morning as we await comments from Jerome Powell. Bonds and MBS are flat. Employers added 184,000 jobs in March, according to the ADP Employment Survey. This was 150k higher than the estimate, and a touch lower than Friday’s 200k forecast. Pay increases were flat at 5.1% for job stayers, but rose 10% for job changers. “March was surprising not just for the pay gains, but the sectors that recorded them. The three biggest increases for job-changers were in construction, financial services, and manufacturing,” said Nela Richardson, chief economist, ADP. “In ..read more

Vital Statistics: Stocks are lower as investors react to the carnage in the bond market. Bonds and MBS are down. The reaction to Friday’s PCE inflation number was probably overdone, but the psychology of the bond market is pretty bi-polar these days. The stronger-than-expected ISM Manufacturing Report didn’t help either, and markets are coming to the realization that this might simply be the new normal. Believe it or not, the May Fed Funds futures are pricing in a tiny chance of a rate hike. The June futures are still leaning towards a cut, and the December futures are still handicapping 75 b ..read more

Vital Statistics: Stocks are higher this morning as markets react to the inflation numbers from Friday. Bonds and MBS are down. Bonds are getting hit from the inflation numbers on Friday and and some hawkish comments from Jerome Powell at a San Francisco Fed event. The inflation numbers were more or less in line with expectations, however inflation is sitting at higher levels than it was 3 months ago. Jerome Powell has mentioned that there might be some seasonal noise in Q1 data (it encompasses more than just inflation) so this might not mean we are looking at a resurgence of inflation. Jerom ..read more