Market Matters

We had seen the 10-year extremely oversold and this week we finally got the bounce we have been looking for, with the 10-year at 2.33. The market has come back some from the high 2.4's earlier this week, and it will be interesting to see if we can push down to 2.25 on the 10-year or if we stall out and it begins to go the other direction. Best to be defensive as this is still a choppy, volatile market that can move very quick.

 

Initial Jobless Claims

Initial Jobless Claims rose 14k to 202k for the week ending March 26th vs. the prior revised number of 188k ( 187k orig.). The four-week moving average is at 208.5k vs. the prior read at 212k. Continuing claims, which lag a week, fell -35k to 1.307mln for the week ended March 19th. This is also now a new low print since 1969.

 

Personal Income

Personal Income rose .5% in February, with personal consumption up only .2%. Within the income numbers, wages and salaries posted a solid contribution of .8%. The personal savings rate remained lower at 6.3%, however, that is a .2% improvement vs. January. Both months' reads are the lowest since December 2013. On the consumption side, the .2% increase included a strong .9% rise in services spending, which is also the biggest gain since July 2021. Nondurables spending fell -.1%, while durables spending fell -2.5%. February's PCE inflation report showed headline consumer prices up .6% MoM, and core prices up .4%, both in-line with expectations. Headline PCE rose from 6.0% YoY to 6.4%, with the core increasing from 5.2% to 5.4%. An initial look into the details shows a little easing in some goods categories offset by a large gain in nondurable goods costs, particularly food and energy items. Services inflation was slightly softer in February.

 

S&P CoreLogic Case-Shiller HPI

According to the S&P CoreLogic Case-Shiller Index, home prices nationally rose 19.2% YoY in January, up from a prior 18.9% in December. The 10-city composite annual increase was 17.5%, up from 17.1% in the prior month, while the 20-city composite rose 19.1%, up from a prior 18.6% in December. Phoenix, Tampa, and Miami saw the biggest annual gains at 32.6%, 30.8%, and 28.1%, respectively. Washington, D.C., Minneapolis, and Chicago saw the smallest annual gains; however, they are still up double digits from a year ago.

 

FHFA House Price Index

The latest FHFA House Price Index showed that housing prices rose nationwide in January by 1.6% from the previous month and were up by 18.2% from January 2021 to January 2022. For the nine census divisions, seasonally adjusted monthly changes ranged from .1% in the New England division to 2.2% in the South Atlantic division. The 12-month changes ranged from 13.3% in the Middle Atlantic division to 23.1% in the Mountain division.