The Dallas bank’s full-year results showed progress toward its long-term strategic goals despite a fourth-quarter drop-off in net interest income heavily tied to its mortgage business, executives said on an earnings call.

Reven Office REIT is seeking $100 million from a lead investor and $900 million through a “blind pool” initial public offering.

Lending activity among builders surged over 22% annually in December, but the growing share of FHA-backed borrowing in the segment took a step back for the first time in four months, the Mortgage Bankers Association said.

Simple, Logical Cause and Effect

Things have been fairly boring for the bond market recently.  We’re in a holding pattern along with the Fed where the most abject threats from economic data have subsided, but where clear confirmation of lower rate momentum has yet to materialize.  Said confirmation could only come from consistently weaker economic data.  Inflation is the most important data, but the labor market is also always a consideration.  Today’s labor market data involved the strongest weekly reading for jobless claims in well over a year.  Thankfully for fans of low rates, this data isn’t a major market mover.  That said, it was a logical market mover today, immediately nudging yields up to new 5-week highs.

Econ Data / Events

Jobless Claims

187k vs 207k f’cast, 203k prev

Philly Fed Index

-10.6 vs -7 f’cast, -12.8 prev

Building Permits

1.495m vs 1.48m f’cast

Housing Starts

1.46m vs 1.426m f’cast

Market Movement Recap

08:45 AM sideways to a hair stronger overnight, but now weaker after data.  10yr up 1.7bps at 4.123. MBS down 3 ticks (.09)

11:44 AM Some resilience after the 9:30am NYSE open, but back to weaker territory now.  10s up 3.2bps at 4.138.  MBS unchanged.

02:36 PM Treasuries bounce back modestly, but still up 2.6bps on the day at 4.132.  MBS down only 1 tick (0.03).

The escalating case would set a new precedent if it established fiduciary duties for entities that manage securitized mortgages that pension funds invest in.

The latest shift in the market-implied odds of a March rate cut was motivated in part by stronger-than-expected December US retail sales data.

To honor Stevens, who started in the secondary market where dry mortgage notes are sold to investors, let’s delve into why the B3E proposal is badly constructed.

After the Rhode Island-based company eliminated 650 positions, severance-related costs contributed to a 71% decline in quarterly net income.

As part of a settlement with the Justice Department, Patriot Bank must invest more than $1 million of the total in a loan subsidy fund for minority homeowners and take other corrective steps in its everyday business. The bank denied any wrongdoing.

Rates have been gradually rising across the board in the past few weeks and mortgage rates are no exception.  Yesterday, it was the market responding negatively to comments from Fed’s Waller.  Today it was a negative response to positive economic data. The whole notion of “bad is good” is an ever-present paradox for fans of low rates.  Rates are based on bonds and bonds do better when the economy is slow and inflation is low.   Today’s Retail Sales report showed stronger consumer spending in December (even after adjusting for holiday spending and inflation).  More spending runs the risk of creating more inflation, or at least of preventing further declines in inflation.  Because inflation is the main reason that rates are as high as they are, a negative reaction in the bond market was the logical outcome. The jump in mortgage rates over the past two days has been a bit bigger than other recent increases.  It takes the average lender back into territory best described as “high 6’s” for a top tier conventional 30yr fixed rate.  It doesn’t necessarily mean the bad times will continue, but the market does look to be circling the wagons in this territory and considering whether the recent optimism for lower rates possible got a bit ahead of itself.