Mortgage Rates Just a Tad Higher

Mortgage rates moved a tad higher along with the stock indexes showing more sign of positive activity today as the tensions overseas has calmed down to a point that few were talking about it. 

Tensions easing, at least the over the top rhetoric from both North Korea and the US last week that caused nervousness. I noted last week that it would cool off even though the fundamental issues remain at high levels. Joint Chiefs of Staff chairman Joseph Dunford arrived in South Korea on Sunday and plans to meet with representatives from Japan and China in the next few days. General Dunford said the purpose of his trip is to "sense what the temperature is in the region," adding, "We're all looking to get out of this situation without a war."

There were no economic measurements today but tomorrow we get a number of them. July retail sales, July import and export prices, August Empire state manufacturing index, June business inventories, and August NAHB housing market index.  

The CEO of Merck resigned from the Trump Advisory Council because he said Trump was slow to condemn the Charlottesville, VA white supremacists who marched and waged violence. Good for him - but we wonder how much of that was not motivated by the Trump Administration ready to declare opiate drugs a national emergency. Most legal analysts commenting have said it will bring on an avalanche of law suits against drug companies. Best to use this incident to remove himself from the other side of the table? Trump, as you know by now did speak out today. No matter the issue, these days the reactions are severe and swift, in this case well warranted. Many key CEOs jumped on it today. It is past time to clamp down on those that still harbor hatred for non-whites, christens, Muslims and foreign-born people.

No inflation - regardless of what you may hear, see or believe inflation is not increasing, wages are only modestly higher, up 3.0% this year but not at the low and middle portion of the labor force. FOMC minutes from the July meeting will be released Wednesday. Most all the Fed and most economists are holding that wages will increase because of the low unemployment levels. That is what should be expected but unemployment has been below 4.6% for months and little to show for it in wage gains.

In summary, all models and other numerous studies I look at are still in the positive column but barley - that has been the situation now for the last week and a half. I will continue to float with uneasiness. No stopping the equity markets but investors still holding US treasuries. Our interest rate much higher than other key sovereigns.