MARKET UPDATE

Jobless Claims slightly lower, PCE at Expectations and Personal Income lower

Overall, the big data release this morning has kept the markets flat.  The 10 yr is still sitting around 4.11 and mortgage rates on higher coupons are down slightly and lower coupons up slightly. 

The Personal Income did come down, which has some positive inflationary inclinations to it.

Some headlines how YoY inflation is up even though the annualized inflation of .2% is 4.2%.  We knew this would happen as we were replacing a lower reading from last August.  That data drops and the new number hits.  Some of these people are not very bright and not able to annualize the current rates of inflation over last few months to get a better idea of where we truly are today. 

One of the Members of the Fed (Atlanta’s), Raphael Bostic, feels that the policy is “appropriately restrictive” and seems to see things rationally as it relates to the markets.  That article is attached.  It is worth the read. 

Another article I read was that Temporary Help has now fallen for 6 straight months.  That is another indicator of gloomier days ahead.

I think the jobless claims number will start to go up in a few weeks once we get through the end of summer.  And when it does, I think we will see a quick drop back into the 3.80 – 3.90 range and maybe even lower.  The market appears to be shifting from a few weeks ago and ready to trade the problems brewing as soon as more significant cracks show.  I am confident they are now not that far off.

Tomorrow will be a big day.  We did not get any negative surprises today.  With a good report tomorrow, we likely will see a run down further from where we are.  A bad report, we may see the 4.20 range again. 

Josh Erskine 

CalCon Mutual Mortgage LLC dba OneTrust Home Loans
Yellowstone RE Holdings LLC
Yellowstone Global Investments LLC