Morning Report: Loan Depot goes public

Vital Statistics:

S&P futures3901-10.3
Oil (WTI)58.24-0.04
10 year government bond yield 1.18%
30 year fixed rate mortgage 2.85%

Stocks are flattish this morning on no real news. Bonds and MBS are down.

Loan Depot is now public, trading under the ticker LDI. They will announce fourth quarter earnings next week. The past year has been a bonanza for mortgage IPOs.

Democrats are still working on a stimulus bill. They plan on inserting a $15 minimum wage increase which guarantees there will be almost no Republican support. They will push it through the Senate via reconciliation which sidesteps the filibuster. Note that the CBO says the 2021 deficit will hit $2.3 trillion, before the new $1.9 trillion stimulus is taken into account.

The housing market’s strength has broadened, according to homebuilder Taylor Morrison. “It’s a phenomenal dynamic we’re seeing out in the marketplace,” Palmer said in an interview on “Closing Bell,” one day after the nation’s fifth largest homebuilder reported fourth-quarter revenue of $1.6 billion, up 6% year over year. Net sales orders were up 46% compared with the same period a year earlier. We’re seeing strength across pretty much all geographies as well as all consumer groups. That’s a shift from a few months ago,” said Palmer, who has led Scottsdale, Arizona-based Taylor Morrison since 2007.

Note that lumber prices are up 113% YOY.

Zillow said that average days on market in December was 17 days, which was 25 days faster than December of 2019. “Homes are flying off the shelves. It’s a really high velocity market and that’s what has resulted in the highest home volume sales we’ve seen in 15 years” said Zillow CEO Rich Barton.

While the official unemployment rate is 6.3%, it is really closer to 10%. The reason is the way the US calculates unemployment. The labor force participation rate has collapsed (the decline is the largest since 1948). Actual employment in January was 10 million fewer than it was in February of 2020.


Author: Brent Nyitray

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

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