Stocks are lower this morning despite a sizeable drop in oil prices. Bonds and MBS are flat.
The week ahead will be dominated by the jobs report on Friday. We will also get ISM data and some Fed-speak.
The partial government shutdown began on Sunday morning, with the House expected to return today. House Democrats are demanding changes in immigration enforcement as a condition to back a resolution. The Senate already passed a plan on Friday to keep the government open, so this is limited to a few recalcitrant House Democrats. If there is a deal today, the brief shutdown probably won’t have any noticeable effects.
That said, there doesn’t appear to be the appetite for a prolonged shutdown like we had in the fall.
Precious metals had a wild ride on Friday, with silver losing 30% after a meteoric rise. Silver’s rise had nothing to do with naturals (i.e. industrial demand); it was completely driven by speculative activity driven by dollar bearishness.
Gold was also smacked around on Friday. The fun continues in the commodity markets as oil is down big this morning after Trump commented positively on the situation in Iran.
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Fed Governor Michelle Bowman still considers monetary policy to be restrictive. “After excluding one-off tariff effects, and with unemployment near estimates of its natural rate but at risk of deteriorating, I continue to see policy as moderately restrictive,” she said.
She said she could have voted to reduce rates, and absent an improvement in the labor market, thinks the Fed should continue to move towards neutrality.
The Spring selling season unofficially kicks off this weekend, and buyers are in the best position in years. The typical buyer got a discount ended up buying the home at 7.9% below listing price, the best since 2012. Overall, most buyers got a 3.8% discount.
“Homebuyers in 2026 shouldn’t write off homes that are slightly above their budget because there’s a good chance they’ll get some sort of concession from the seller, be it a price cut, money toward closing costs or funds for repairs,” said Redin Senior Economist Asad Khan. “This marks a reversal from the pandemic homebuying frenzy, when house hunters were advised to search for homes below their budget because fierce bidding wars were causing properties to sell far above the asking price.”
Florida condos are seeing the biggest discounts, with West Palm seeing close to 11%.
