Good evening,
Today was a fairly benign trading day basically closing flat to yesterday’s close. One of today’s economic releases was the CaseShiller housing price index to which I have found an in depth article.
Pending Sales Down, Home Prices and Consumer Confidence Today
by Craig Dismuke
The International Council of Shopping Centers weekly retail sales report, released this morning, show sales down 0.2% WoW but up 3.6% YoY, for the week ending September 27. ICSC estimates that comp. store sales growth will be above 4% in September. At 8 a.m. CT, the S&P CaseShiller Home Price report will be released and is expected to show the YoY pace of home price gains slowing from 8.07% to 7.40%. The pace of YoY gains peaked at 13.70% in November 2013. At 8:45 a.m., the Chicago Purchasing Managers Index will be released. At 9:00 a.m., the Conference Board Consumer Confidence report is projected to rise fractionally after a 20-point run that began back in November. In the Eurozone, core CPI fell from 0.9% to 0.7% YoY, lower-than-expected. Headline inflation is still estimated to be at 0.3% YoY. The protests continue in Hong Kong as students, and others, demand universal suffrage without having candidates approved by Beijing. National Day is tomorrow, a day marked as a holiday in China (and Hong Kong) in remembrance of the establishment of the communist government – the PRC – back in 1949. This could make the protests more or less of a disturbance. For now, it appears unlikely that the situation will have a significant economic impact, but it does represent one more flashpoint for populous protests against governments.
Treasuries are off a bit this morning with the 10-year yield back up to 2.50%, despite the weaker-than-expected Eurozone inflation report. While Treasuries have not completely decoupled from Eurozone bond trends, the correlation has loosened. There is likely to be profit-taking today as the quarter closes, as there was during the overnight session, which could keep a little pressure on Treasury prices. However, the post-quarter-end will be more important to watch. Over the last four quarter-ends, the 10-year yield has risen between quarter-end and the nonfarm payroll release by an average of 10 bps. On the opposite end of the curve, investors are scrambling to find safe, short assets while the Fed has put a cap on its reverse repo facility at $300 billion. Because of the cap, investors are having to find other places to park their short-term money which has caused T-bill yields to go negative in many cases.
Pending Home Sales for the month of August, released yesterday, were disappointing, falling 1.0%. Sales were expected to pull back 0.5% after July’s positive 3.2% gain. Despite the weaker-than-expected performance in August, existing home sales appear to be in the midst of an improving trend after dropping almost 15% from last year’s peak. Pending sales are, in fact, up four out of the last six months and have increased 10% during that time.
Treasuries are off a bit this morning with the 10-year yield back up to 2.50%, despite the weaker-than-expected Eurozone inflation report. While Treasuries have not completely decoupled from Eurozone bond trends, the correlation has loosened. There is likely to be profit-taking today as the quarter closes, as there was during the overnight session, which could keep a little pressure on Treasury prices. However, the post-quarter-end will be more important to watch. Over the last four quarter-ends, the 10-year yield has risen between quarter-end and the nonfarm payroll release by an average of 10 bps. On the opposite end of the curve, investors are scrambling to find safe, short assets while the Fed has put a cap on its reverse repo facility at $300 billion. Because of the cap, investors are having to find other places to park their short-term money which has caused T-bill yields to go negative in many cases.
Pending Home Sales for the month of August, released yesterday, were disappointing, falling 1.0%. Sales were expected to pull back 0.5% after July’s positive 3.2% gain. Despite the weaker-than-expected performance in August, existing home sales appear to be in the midst of an improving trend after dropping almost 15% from last year’s peak. Pending sales are, in fact, up four out of the last six months and have increased 10% during that time.
Capital Markets
Primary Residential Mortgage, Inc.
1480 North 2200 West| Salt Lake City| Utah| 84116
Toll Free 1.800.255.2792
o Tick 1/32 or .03125
o MBS Mortgage Backed Security
o TBA To Be Announced (MBS with unknown future delivery)
o Spec Specified Pool
The contents in this memo are not an endorsement of any financial products or investments. PRMI assumes no liability, and will not make any recommendations with respect to the purchase or sale of any investment security or its derivatives.
Economic Calendar
Date/Time(Central)
|
Indicator
|
Period
|
Est.
|
Actual
|
Prior
|
Revised
|
9/29/2014 7:30 AM
|
PCE Core (MoM)
|
AUG
|
0.0%
|
0.1%
|
0.1%
| |
9/29/2014 7:30 AM
|
PCE Core (YoY)
|
AUG
|
1.4%
|
1.5%
|
1.5%
| |
9/29/2014 7:30 AM
|
PCE Deflator (YoY)
|
AUG
|
1.4%
|
1.5%
|
1.6%
| |
9/29/2014 7:30 AM
|
Personal Income
|
AUG
|
0.3%
|
0.3%
|
0.2%
| |
9/29/2014 7:30 AM
|
Personal Spending
|
AUG
|
0.4%
|
0.5%
|
-0.1%
|
0.0%
|
9/30/2014 8:00 AM
|
S&P/CaseShiller Comp-20 (YoY)
|
JUL
|
7.40%
|
8.10%
|
8.07%
| |
9/30/2014 8:00 AM
|
S&P/CaseShiller US HPI
|
JUL
|
174.45
|
172.33
| ||
9/30/2014 8:45 AM
|
Chicago Purchasing Manager
|
SEP
|
62.0
|
64.3
| ||
9/30/2014 9:00 AM
|
Consumer Confidence
|
SEP
|
92.5
|
92.4
| ||
10/1/2014 12:00 AM
|
Domestic Vehicle Sales
|
SEP
|
13.55M
|
13.87M
| ||
10/1/2014 12:00 AM
|
Total Vehicle Sales
|
SEP
|
16.80M
|
17.45M
| ||
10/1/2014 6:00 AM
|
MBA Mortgage Apps.
|
26-Sep
|
--
|
4.1%
| ||
10/1/2014 7:15 AM
|
ADP Employment Change
|
SEP
|
202K
|
204K
| ||
10/1/2014 9:00 AM
|
Construction Spending (MoM)
|
AUG
|
0.4%
|
1.8%
| ||
10/1/2014 9:00 AM
|
ISM Manufacturing
|
SEP
|
58.5
|
59.0
| ||
10/1/2014 9:00 AM
|
ISM Prices Paid
|
SEP
|
57.0
|
58.0
| ||
10/2/2014 7:30 AM
|
Initial Jobless Claims
|
27-Sep
|
300K
|
293K
| ||
10/2/2014 7:30 AM
|
Continuing Jobless Claims
|
20-Sep
|
--
|
2439K
| ||
10/2/2014 9:00 AM
|
Factory Orders
|
AUG
|
-9.0%
|
10.5%
| ||
10/3/2014 7:30 AM
|
Avg. Hourly Earnings (MoM)
|
SEP
|
0.2%
|
0.2%
| ||
10/3/2014 7:30 AM
|
Change in Manufact. Payrolls
|
SEP
|
12K
|
0K
| ||
10/3/2014 7:30 AM
|
Trade Balance
|
AUG
|
-$41.0B
|
-$40.5B
| ||
10/3/2014 7:30 AM
|
Unemployment Rate
|
SEP
|
6.1%
|
6.1%
| ||
10/3/2014 9:00 AM
|
ISM Non-Manf. Composite
|
SEP
|
58.5
|
59.6
|
