Good Tuesday AM,

How about this for an opening stat?  For every one person that moved out of Las Vegas during the pandemic, 1.32 people moved in. Just one more reason property values have risen.

Getting to it… Stocks, which for now are the lever for bonds (and why I mention them first most days), are up. Yesterday they started up as well and faded as the day moved on to close negative. Lots of comments about failed IPOs likely took the wind out of the sails of equities, despite the first vaccines being administered. Bonds are flat to marginally weaker this a.m. The 10-yr has backed up to .91% and mortgage bonds are off a bit. There was some economic data this a.m. (mentioned below) which was on both sides of the fence so no movement there. I expect the day to roll on similarly in a neutral stance pending tomorrow’s FOMC meeting. The markets are looking at bond purchases. How much and of what duration (long term bonds vs short term bonds)? Main two points here are that: if Fed bond purchases decline, rates will jump; if the Fed starts buying shorter term bonds, rates will push higher.  I don’t see much of a reason to float any loans closing this month.

• Industrial Production 0.4 vs estimates of 0.3
• Capacity Utilization 73.3 vs estimates of 72.9
• Import Price MOM -1.0 vs estimates of -1.0
• Empire MFG 4.9 vs estimates of 5.8

Stimulus looks to be getting done in the next day or two. The agreement is watered down to 748b and is now focused on people in need. Not protecting businesses or funding municipalities. To me, this is another stop gap to get to the potential shift in the Senate (this is not something we should be hopeful for) and then the inauguration where there will be a more liberal bill passed (also not something we should hope for).

Last, Dr. Anthony Fauci predicted that people with no underlying conditions would get the vaccine by the beginning of April. By fall, he said, life may start to look normal again.

Please remain safe and healthy, make today great!