Morning Report: FOMC begins

Vital Statistics:

Stocks are lower this morning after Google missed earnings last night. Bonds and MBS are down.

The FOMC begins its 2 day meeting this morning. The result should be announced tomorrow at 2:00 pm. No changes are expected in policy.

The employment cost index rose 0.7% in Q1, driven by a 0.7% increase in wages and a 0.7% increase in benefit costs. On an annualized basis wages and salaries increased 2.9% and benefits increased 2.6%.

Home Price Appreciation continues to slow, according to the Case-Shiller Home Price index. The index increased 4% YOY, compared to 4.2% in the previous month. “The pace of increases for home prices continues to slow,” says David M. Blitzer, Managing Director
and Chairman of the Index Committee at S&P Dow Jones Indices. “Homes began their climb in 2012 and accelerated until late 2013 when annual increases reached double digits. Subsequently, increases slowed until now when the National Index is up 4% in the last 12 months. Sales of existing single family homes have recovered since 2010 and reached their peak one year ago in February 2018. Home sales drifted down over the last year except for a one-month pop in February 2019. Sales of new homes, housing starts, and residential investment had similar weak trajectories over the last year. Mortgage
rates are down one-half to three-quarters of a percentage point since late 2018.

“The largest year-over-year price increase is 9.7% in Las Vegas; last year, the largest gain was 12.7% in Seattle. Regional patterns are shifting. The three California cities of Los Angeles, San Francisco and San Diego have the three slowest price increases over the last year. Chicago, New York and Cleveland saw only slightly larger prices increases than California. Prices generally rose faster in inland cities than on either the coasts or the Great Lakes. Aside from Las Vegas, Phoenix, and Tampa, which saw the fastest gains, Atlanta, Denver, and Minneapolis all saw prices rise more than 4% — twice the rate of
inflation.”

Author: Brent Nyitray

In the physical sciences, knowledge is cumulative. In the financial markets, it is cyclical View all posts by Brent Nyitray