Morning Report: Tech sell-off continues

Vital Statistics:

S&P futures3373-44.6
Oil (WTI)37.34-2.47
10 year government bond yield 0.68%
30 year fixed rate mortgage 2.93%

Stocks are lower this morning as last week’s market sell-off continues. Bonds and MBS are up

Small business sentiment improved in August, according to the NFIB. The index rebounded back to its historic level. Hiring plans were definitely the bright spot in the report, as a net 21% of firms plan to hire in the next 6 months. Demand for skilled construction workers is high, but finding them is tough.

Intercontinental Exchange, the parent company of the New York Stock Exchange has completed its $11 billion purchase of Ellie Mae. ICE already owns MERS and Simplifile. “We are excited to begin the next important chapter in our journey to digitize the residential mortgage industry,” said Jeff Sprecher, founder, chairman and CEO of Intercontinental Exchange. “Ellie Mae’s industry leadership and best-of-breed technology will better enable us to further accelerate the automation of the mortgage origination workflow, which will benefit stakeholders across the production chain, including consumers.”

Productivity improved for the mortgage industry last quarter. The median productivity for sales employees (mainly LOs) was 7.4 loans per month, compared to 4.5 loans in the first quarter. Fulfillment employees were closing 8.4 loans a month versus 5.5 in the first quarter.

Urban apartment REITs are seeing big cuts in rent, as they try and “buy occupancy.” NYC rents are down 15%, while Bay Area rents are down 9%. The eviction moratorium (put out by the CDC) isn’t helping things. When the Center for Disease Control is making apartment regulations, you have to wonder if HUD is about to weigh in on vaccine efficacy. Note that campus housing REITs are struggling as well, as colleges move towards remote learning.


Author: Brent Nyitray

In the physical sciences, knowledge is cumulative. In the financial markets, it is cyclical

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