Good Friday AM,

Mr. Trump’s comments late yesterday on China certainly let a little air out of the equity bubble. The Dow sold off about 300 by the close and are down another 230 this a.m. as markets wait for Mr. Trump’s speech on China. No insight yet what he might, say so the cautiousness is warranted. Mr. Trump could change the trading status with Hong Kong as new laws from Beijing no longer support Hong Kong to be an autonomous trading partner with the US. Bonds are seeing some love from a small risk-off sentiment (some weak data, which is below, and of course the new trade issues with China). The 10-yr back to .66 and mortgage bonds up about a dozen. Mortgage rates and pricing are not moving much at all.

• Core PCE YOY 1.0 on expectations of 1.1
• Personal Spending -13.6 on expectations of -12.6
• Personal Income 10.5 on expectations of -6.5   **** This positive metric is due to unemployment checks counted as income ****

Some good news for housing is that while resale numbers were pretty terrible in April, early data for May, along with a rise in new loan applications, point to a quick recovery in housing (and likely housing alone). The recovery is likely to be limited by inventory and not by demand. Pricing should be stable. On the financing side, we are seeing credit open up again, with greater access to all programs (lower credit scores, jumbo loans, bank statement programs, etc.).

Enjoy the weekend, please stay safe and healthy, make today great!