Good Morning on this fantastic Wednesday,

Stocks opened to the upside this a.m. based on some commentary from Larry Kudlow yesterday at the White House yesterday that the President is gearing up for meaningful talks with the Chinese President next week. I am cautions at best that anything real will come from those talks; there are though the looming tariffs which increase on Jan 1, so a fair amount of motivation to make some headway. Then a few moments ago, Fed Chair Powell concluded his speech in NY and mentioned that the Fed Funds rate is just below neutral, signaling that there may not be many more rate hikes to come. Markets seem happy with that and stocks are pushing higher (Dow up 400) Bonds are also improving with the 10-yr at 3.05% and mortgage bonds +20bps. We will see how it all settles, but this seems to be a start of a good day.

The news this morning was a bit mixed. GDP slightly missed expectations but was unchanged from last month. New home sales were much lower than expected, whole retail and wholesale inventories improved from last month.

We also received some good news from FHFA yesterday which increased the 2019 Conventional loan limits to $484,350. VA will follow suit raising their limit as well to $484,350 and FHA has not announced yet, but must be statutorily at least 65% of the conventional limit so that will get a bump as well to $314,827.

Make today great!