Friday, February 28, 2020

Daily Market Report 2/28/20 A lot of data to report today, which we'll start with Personal Income for January.  It rose 0.6%, which was double it's forecast.  Consumer Spending rose only 0.2% in January, which is half of what was reported in December, and less than forecast.  Both the Personal Consumption Expenditure and it's Core PCE (the PCE without food and energy) rose only 0.1% in January.  However, the YoY for the PCE went from 1.5% to 1.7% in January; whereas, the Core PCE rose from 1.5% to 1.6%.  The Core PCE is the Fed's favorite gauge for inflation; and it's currently under it's Target rate of 2.0%.  Manufacturing improved in the Chicago region; however, it's still in Contraction mode; as the Chicago PMI rose from 42.9 to 49.0 in February.  Consumer Sentiment improved slightly from January to February, as it went from 100.9 to 101.0.  Even though, the data is very good today, Stocks are still under heavy pressure on worries over the coronavirus; as the DOW is on pace to lose over 4200 points this week.  This is greatly benefiting Mortgage Rates, as MBS is Up 61bps this morning.  Yields have free-fallen down to 1.15%.  We are at All Time Lows for Yields!

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