Vital Statistics:
| Last | Change | |
| S&P futures | 4,225 | 22.8 |
| Oil (WTI) | 68.59 | 2.27 |
| 10 year government bond yield | 1.63% | |
| 30 year fixed rate mortgage | 3.15% |
Stocks are higher this morning after we return from a 3-day weekend. Bonds and MBS are down.
The big event this week will be the jobs report on Friday. Given April’s disappointing payroll number, investors will be looking to see if it is revised upward.
Home prices rose 13% in April according to CoreLogic / Case-Shiller. They are forecast to rise only 2.8% over the following 12 months. A lack of inventory is driving home prices higher, and that is often due to older homeowners preferring to stay in their homes longer. Boomer owner-occupants are staying in their homes for 13 years, which is 50% longer than previous generations. Most of the country has seen double digit appreciation except for New York, where appreciation is close to 0%.
The eviction moratorium is scheduled to expire at the end of June. The CDC estimates that 15% of renters are behind on their rental payments, which means that eviction filings should have a huge bump if the CDC doesn’t extend the moratorium again. Housing advocates are arguing that it should be extended, at least until some rental aid checks are distributed, but with the economy re-opening, it is getting harder to argue that the original reason for the moratorium is still a valid one.
Manufacturing expanded in May, according to the ISM Manufacturing Report. New Orders improved, while production and employment-related sub-indices fell. Prices fell, which is surprising given that shortages continue to be an issue.
The manufacturing economy continued expansion in May. Business Survey Committee panelists reported that their companies and suppliers continue to struggle to meet increasing levels of demand. Record-long lead times, wide-scale shortages of critical basic materials, rising commodities prices and difficulties in transporting products are continuing to affect all segments of the manufacturing economy. Worker absenteeism, short-term shutdowns due to part shortages, and difficulties in filling open positions continue to be issues that limit manufacturing-growth potential.
Construction spending rose 0.2% MOM and 9.8% YOY, according to Census. Residential construction rose 30% on a YOY basis, which was driven by depressed numbers during the lockdown days.
The Daily Tearsheet 