Friday, March 27, 2020

Daily Market Report 3/27/20 We have a few economic data to review today, which we'll start with the Personal Income, which rose 0.6% in February; along with Consumer Spending, which rose 0.2% in February.  The Fed's favorite gauge for Inflation is the Personal Consumption Expenditure, actually the Core PCE (without food or energy, as they're uncontrolled variables).  The PCE rose 0.1% MoM, and it's YoY remained Unchanged at 1.8%.  The Core PCE rose 0.2% MoM, and it's YoY rose from 1.7% to 1.8%.  This is still under the Fed's target rate of 2.0% and most likely will dip in the coming months, as there's no inflationary pressure currently.  Lastly, the Consumer Sentiment dropped (expected) from it's earlier report of 95.9 to 89.1.  Stocks are deep in the Red this morning, as Investors are worried that the US coronavirus cases may have exceeded China's.  The Stimulus Package is currently with the House for their Vote today.  Pelosi is confident it will pass, as there have been some rumblings from some in the party that they may block it.  Fingers crossed that it moves along.  MBS is currently Up 77bps, which would technically help Mortgage Rates; but instead, it's exacerbating an issue with Lenders on Margin calls.  This is being done inadvertently by the Fed, as they continue to purchase MBS and Treasuries.  It would normally help us, but this is not good timing for the Lenders to handle this.  Meanwhile, Yields have fallen down to .74% now.

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