July 17, 2023 – Economic News

• July 17, 2023
• realestatelife
• Business & Markets, Fed, Interest Rates, Politics & Economy, Rates, Real Estate, Real Estate Finance, Recession, World News, Your Real Estate Life

MBS OVERVIEW

Our benchmark FNMA MBS 6.00 August Coupon is currently up +11 BPS.

Rosie the Riveter: The July NY Empire Manufacturing Index surprised to the upside in the Fed’s district, showing expansion of 1.1 vs. est. of 0.0. It is that index’s second straight month of growth.

Yellen is Yelling: Treasury Secretary Janet Yellen said that she did not think that the U.S. would slip into a recession.

On Deck for Tomorrow: Retail Sales, Retail Sales Ex Autos, Industrial Production and Capacity Utilization, NAHB Housing Market Index

Very quiet this morning, but by mid-afternoon some buying of treasuries kept the curve holding flat. MBS prices did improve a little this afternoon.

Bank of America reports earnings tomorrow and the outlook doesn’t impress according to those that know. The bank is loaded with mortgage debt ($625B), it isn’t alone JP Morgan/Chase and Wells also loaded with that debt. It won’t show up in the earnings report because much of it is listed as “held to maturity” so whatever current losses might be if sold don’t matter. Recall Silicon Valley Bank, it fell partly because it accounted for much of its liability was marked “held to maturity” but it is real and would amount to a sizeable amount it is tangible equity it held at the end of the quarter ($182B). BofA isn’t Silicon Valley Bank. The bank’s earning expected at $0.84 from $0.73 last year. We only mention it because there isn’t much other news. Big banks strong but when regional banks begin reporting the news may not be very good. Also, we saw credit card delinquencies are increasing according to new reports.

Tomorrow the June retail sales data; m/m sales expected to have increased 0.5% from +0.3% in May, excluding vehicles +0.3% from +0.1%. June industrial production expected 0.0% from -0.2%, capacity utilization 79.5% from 79.6%. May business unchanged from April inventories.

For our readers, the July NHAB housing market index at 10 am tomorrow. The index thought to be at 56 from 55. The index has been inching higher since its low index at 36 four months ago. Housing strong and with interest rates plateauing and not much inventory in existing home sales home builders’ stocks have been increasing.

China’s strong growth is slowing, New forecasts that China’s economy increased 6.3% in Q2, marked down from 7.3% expectations.