Vital Statistics:
| Last | Change | |
| S&P futures | 3198 | 23.1 |
| Oil (WTI) | 40.24 | -0.31 |
| 10 year government bond yield | 0.67% | |
| 30 year fixed rate mortgage | 3.12% |
Stocks are higher this morning as earnings season kicks off. Bonds and MBS are down small.
Earnings season officially starts tomorrow, with JP Morgan, Wells and Citi reporting second quarter earnings. Mortgage banking revenues should be top-notch, but the big question will be whether the COVID writedowns for the first quarter are sufficient to cover expected losses. A lot of attention will be paid to commercial real estate loan performance as well.
There will be some housing economic data this week with housing starts and the NAHB Housing Market Index. Market-moving data will be rare for the time being with the Fed firmly stuck at the zero bound for the next year or two.
Forbearances are falling, according to Black Knight’s Forbearance Tracker. The number of borrowers in forbearance fell by 435,000 last week to 4.1 million. This represents 7.8% of all mortgages.
The housing recovery is as strong as ever, as prices increased 6.2% in the week ending June 27. Bidding wars are back, inventory is light, and interest rates are at record lows. I will be extremely interested in the housing starts and building permits numbers on Friday. I could see housing as the industry that takes the lead in the economic recovery. Redfin reported that over 50% of transactions were competitive.
The Daily Tearsheet 