Market Wrap 9/11/20 S&P 500 DOW MBS Core CPI 0.4% FED 5% Inflation Rents...

Market Wrap-Friday 9/11/2020
Stocks have ended the day higher. The Dow closed +131.06 at 27,665.64 and the S&P 500 closed +1.78 at 3,340.97. Mortgage Bonds ended the day 11bp higher.

Economic News
The big news of the day was Inflation -The Consumer Price Index(CPI), which measures inflation on the consumer level came in at 0.4% in the month of August.The year over year reading increased from 1.0%to 1.3%.The Core reading,which strips out food and energy prices,also increased by 0.4%month over month and the year over year reading increased from 1.6%to 1.7%. Within the report, rents are rising 2.9% across the US.which is down from 3.1%.The medical care index rose 4.5%from last year.

Inflation has been rising sharply, especially on a month over month basis. If we saw 0.4% inflation each month, it would equate to a 5% inflation rate. For now,the year over year Core reading is 1.7%, but its the hottest it's been in 6 months.This could continue to rise, especially as the economy opens back up.Demand is likely to come much faster than supply, as we know supply chains have been compromised.If that were to occur rates can rise.Then the message to your customers should be to not wait, not procrastinate, and get their docs in ASAP. Rates may not
stay low forever.

Upcoming Events
Next week is a buys week, highlighted by new construction housing data via the NAHB Housing Market index and Housing Starts and the Fed meeting.The Fed will be keeping rates at 0%, but their comments on inflation will be key to listen to.We will break it all down next week.

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