http://MikesDailyMarketReport.com: Housing Starts rose by 6.8% in February to 1.769 million seasonally adjusted units; however, Building Permits (future Housing Starts) dropped 1.9% to 1.859 million. This matches the drop in Home Builder Confidence, which is mostly attributed to the higher Mortgage Rates and lower Affordability. Meanwhile, the Philly Fed Index surpassed forecasts in March to 27.4. This index measures manufacturing in the Philadelphia region. This improvement is a vastly different view than what we saw from the NY region earlier this week which contracted. The Initial Jobless Claims dropped down to 214k last week; and Continued Claims dropped too. Lastly, the Industrial Production rose 0.5% in March. The Bank of England hiked their rates today, like our Fed yesterday, but the rest of their announcement was rather Dovish; so, the Markets didn't really react to it. As you know the Fed hiked the Fed Funds Rate yesterday by 0.25% and announced there will be more to come (approximately 6 more) this year. They also, mentioned that they may begin discussion of the Balance sheet at the next FOMC. So, prepare for more choppiness in the Markets. Yesterday, was a bit like a seesaw, as we saw MBS really drop after the announcement (like -63bps), only to close Down 39bps. Today, Investors are buying on the Dip and Mortgage Rates are slightly better than yesterdays close, as MBS are currently Up 19bps. Yields have come down a little as a result too, as it's now around 2.16%.
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