Morning Report: Decent jobs report

Vital Statistics:

 

Last Change
S&P futures 3049 13.25
Oil (WTI) 54.82 0.64
10 year government bond yield 1.71%
30 year fixed rate mortgage 3.92%

 

Stocks are higher after a decent jobs report. Bonds and MBS are up small.

 

Jobs report data dump:

  • Payrolls up 128,000 versus 90,000 expected
  • Unemployment rate 6.3%
  • Manufacturing payrolls – 36,000
  • Labor force participation rate 63.3%
  • Average hourly earnings up 0.2% MOM / 3.0% YOY

Overall a pretty decent report. Payrolls were depressed by the GM strike (about 46,000 workers), however the labor force participation rate ticked up and the employment-population ratio was flat at 61%. The two month revision was up 95,000 as well – September payrolls were revised upward by 44,000 and the August number was revised upward by 51,000. So, if you add back the GM strikers, and take into account the revisions, August’s number becomes 219,000, September becomes 180,000, and October becomes 174,000. Certainly nothing that would indicate any sort of major slowdown in the US economy.

 

Pennymac reported good numbers last night, with originations increasing to $35 billion in the last quarter. This was up 44% from Q2 and almost double last year. As expected, they took a hit on MSR valuations as rates fell, but they got a lot of that back on their hedges. Good times abound in origination business.

 

TRI Pointe reported numbers that beat the street, however revenues declined, as did average sales prices. That said, margins are increasing which is good news for the building sector. The S&P Homebuilder ETF (XHB) is up 54% so far this year.

Advertisements

Author: Brent Nyitray

Why do you need new bands? Everyone knows rock attained perfection in 1974. It's a scientific fact. - Homer Simpson

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s