Good Thursday AM from your hometown lender,

The market forecaster seems to be getting it right this week.

Yesterday CPI in on target, today PPI was the same. Unemployment claims dropped marginally but that is not impacting us today. Later in the day, Mr. Powell sits down with some Fed comrades in Dallas. All can change when the market dissects what is said. On the day, the 10yr is back to 4.41% and mortgage bonds are extending yesterday’s gains by another 15bps. We will not see much of an improvement in rates yet.

Dr. Elliott Eisenberg shared an interesting observation last night:

Pre-election, consumer sentiment rose slightly. However, sentiment among the middle class slid, as did sentiment among the prime breadwinning 35–54-year-olds. Moreover, median wage growth expectations through 10/25 were very weak. Yet 60% of households think the bull market will rage on for at least another year, and expectations of improved personal finances in one year rose substantially. It’s the mercurial stock market, not the bread-and-butter economy that’s driving sentiment.

Tomorrow brings the important Retail Sales report.

It is expected to come in much lower than last month. If it does come in at .3% as expected, markets should improve further. We are a ways away from getting into a lower trading channel to help rates improve but any little help is… help. If tomorrow’s print is much more than .3%, well, rates will worsen. Needless to say, it is an important report.

Stay safe and first, make today great!