Good Tuesday AM,
First real set of data this week. CPI came in as expected at .2 increase… well sort of. The truth is that the FED rounds up the number. Core CPI actually came in at .1501 and it was rounded up to .2%, this is a huge drop from last month’s .05% increase and is soothing the market. Annualized, CPI is at 1.8%, Bonds are on the plus side today and Mortgage bonds are +4bps with the 10-yr at 2.85%. A close below 2.84% sets us up for some improvement. I’m keeping fingers and toes (all 11) crossed for that. Tomorrow is retail sales and after last month’s drop of .3%, markets are expecting a rebound number to +.3%. Seems unlikely to me but keep in mind, the bigger picture is the Fed is going to raise rates next week and at least twice more this year.
Mike Fratantoni, Chief Economist for the MBA dropped eye opening insight on CNBC sharing that home prices are increasing at double the rate of income. That cant be good long term.
Make today great!