MBS Highway Daily Updates 04/17/2023
Current position: Carefully Floating
We will be hosting a webinar with John Mauldin, who is one of the most brilliant economists in the world, later today at 1:30 pm ET to discuss the economic outlook. You can register HERE.
Stocks are mixed, and mortgage bonds are lower to start the week but well off their worst levels.
According to Kelly Blue Book, the average car payment is now $800, which has doubled in three years. This doesn't consider the newer six-year car loans, which are being used to help reduce the monthly cost, but shows the impact the Fed rate hikes had on car loan interest rates. With that considered, the average cost would be even higher.
Additionally, credit card rates have risen above 20% from 14% back in March of last year. At the same time, outstanding credit card debt has risen drastically.
Between car loans, credit cards, and home equity lines of credit, your customers' blended rates are likely much higher, and you may be able to help them with a cash-out refinance using our debt consolidation tool.
Cass Freight Index
The March Cass Freight Shipments Index fell almost 4% and was a result of soft retail sales trends, ongoing destocking, and sharp import declines. They also believe that weak shipping volumes will persist for some time.
Expenditures, which are a measure of shipping costs, dropped 1.5% in March and are down almost 3% year over year. Dividing the expenditures by the shipments gives you the implied freight or cost per shipment, which declined 0.4% last month and is down 8.3% year over year. This is expected to drop by 9–10% in April on a yearly basis. This is good for producer prices and overall inflation.
Later this morning: NAHB Housing Market Index
Tuesday: Housing Starts and Permits
Wednesday: Mortgage Apps, 20-year Bond Auction, Fed's Beige Book
Thursday: Initial Jobless Claims, Existing Home Sales
Mortgage Bonds opened the day much lower but have managed to climb back above their 50-day moving average and gain much of their early losses. If Bonds can remain above this level, there is a lot of room to the upside before reaching resistance at the 100.758 Fibonacci ceiling. If the 50-day is broken, we will have to switch our stance, as there is a lot of room on the downside. The 10-year has broken convincingly above its 200-day moving average, which is something we have to watch. After locking on Friday, we can begin the day carefully floating.