It’s Bill Rapp, the Mortgage Viking here, let me tell you about what the Good Ole Boys on Wall Street are talking about today…
Despite all the talks of an economic slowdown, investors are falling over themselves to buy high yield bonds. While, I have stated, credit spreads in high yield aren’t terribly attractive both on an historical basis, and probably for this stage of the credit cycle, wider credit spreads over the last 6 weeks have been attractive relative to equities.
Jobless claims remain low, suggesting that neither 2018 year-end market volatility, nor the government shutdown is yet impacting the labor market.
With Retail Sales reports on hold until the government shutdown ends, consumers are seeming at least buying houses. Weekly mortgage applications have jumped in recent weeks as strong labor markets and rising wages, combined with falling mortgage rates, are perhaps driving the move.
Weekly mortgage applications jumped another 14%, after 24% the previous week as there are signs of life in the housing market to start 2019. Helping this has been the 0.50% decline in the average 30Y mortgage rate since November.
Import prices didn’t fall as far as expected as rising natural gas prices offset the dollar strength that has been a drag of late.
This is Bill Rapp, the Mortgage Viking, and please do not forget to subscribe and share this post if you found it useful!
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