Friday, January 15, 2021

Daily Market Report 1/15/21   We have a number of items on the Economic Calendar today, which we'll start with the Producer Price Index for the month of January.  The PPI rose 0.3% in January; whereas it's Core PPI (excludes food and energy)  rose 0.1% and it's YoY dropped from 1.4% to 1.2%.  The PPI is inflation data for the Wholesale sector, so it doesn't have as much impact as the CPI or PCE.  Retail Sales disappoint again, as it dropped 0.7% in December; and when you exclude Autos, it dropped 1.4%.  Manufacturing continues to slow down in the NY region, as the Empire State Index reports that it went from 4.9 in December to 3.5 in January (anything above 0 is expansion; and below is contraction).  Capacity Utilization grew to 74.5% in December; and Industrial Production rose by 1.6%.  However, Consumers weren't feeling it in January, as the Consumer Sentiment dropped from 80.7 in December to 79.2 in January.  Also, Business Inventories rose only 0.5% in November.  Stocks are Down this morning on the poor data with Retail Sales, Empire State Index and Consumer Sentiment.  The announcement of the $1.9 Trillion Stimulus package was announced yesterday, but there are concerns that it still may not pass with some of the more moderate Democrats, as they may feel it's too big.  Also, the slow rollout of the vaccinations is weighing on Investors, as Pfizer announced they will rolling out less this year to Europe.  MBS is Improving today, as it's Up 22bps this morning.  However, yesterday, we had a late pullback and closed Down about 16bps (so most Lenders repriced for the worse).  Mortgage Rates are about what we found yesterday morning and Wednesday's close (Unchanged); and improved from yesterday's close.  Yields have been trending (for the most part) between 1.09% and 1.10%.  It's currently sitting just a hair under 1.09%, on the Technical floor.

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