http://MikesDailyMarketReport.com: Housing Starts dropped 7.0% in July, the numbers were 1.65 million seasonally adjusted units in June to 1.534 million in July. However, Building Permits (future Housing Starts) rose 2.6%, which it's numbers were from 1.594 million seasonally ajusted in June to 1.635 million in July. Meanwhile, the Markets are gearing up for the release of the last FOMC's Notes for any clues about discussion of tapering. Investors will be looking ahead to next week's Jackson Hole's Symposium to see if the Fed drops any more clues. We have already heard from several members whom support the discussion at Septembers meeting. However, there are some whom think the Fed may want to see Septembers data before approaching the decision. Hopefully, next week will be that indicator! Stocks are Mixed, as NASDAQ is lone index in Positive Territory, which have been affected by today's economic data and comments by St Louis Fed Bullard yesterday, as he stated that the Fed should monitor the red hot housing market, as this woud lead to more discussion on tapering. If you're not aware of what is tapering, then it's simply the reduction of the Fed's current purchase of $120 billion/month of MBS and Treasuries, which was used to create liquidity in the Markets when the Pandemic crisis started last year. These purchases have helped keep Mortgage Rates down, but will rise once the Fed begins to taper, as there will be less demand. MBS lost some ground yesterday afternoon and began the day much lower; however, did rebound some by mid-day. MBS is currently Down 2bps, but with yesterday's losses and today's start, then Lenders will come in with worse pricing with their ratesheets. When I say worse pricing for this scenario, it's about .125% in the interest rate; so, a 3.0% rate yesterday might be 3.125% today. Just for some clarification. Also, adding to the pressure to MBS is Yields rise to 1.28%, which rose past it's Technical ceiling and 25 DMA. The next Technical ceiling is around 1.30%. We'll see if this will hold for any future tests!
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