Wow, that was quick. Ahead of today’s 2nd day of the FOMC meeting, the MBA said both applications for refi’s and purchases are now below the levels of mid Sept when the Fed decided to further help the housing market with more QE. Refi’s fell for a 3rd straight week by 12.9% to the lowest since the week ended Sept 7th and purchases were lower by 8.3% to the lowest since Aug 31st. The avg 30 yr mortgage rate is down by just 10 bps since the Fed news at the cost of $40b per month (obviously more $ to spend but markets discount). The costs of an eventual Fed exit will far outweigh any benefits.
Germany’s IFO business confidence # fell 1.4 pts to 100, the lowest since Feb ’10 as current conditions fell. The Euro zone mfr’g and services composite index fell to 45.8, the weakest since June ’09. A UK mfr’g index fell to -23 in Oct from -8, matching the lowest since June ’10. Italian consumer confidence ticked up a touch to 86.4 in Oct vs the record low of 85.5 in June.
The preliminary HSBC Chinese mfr’g PMI rose to 49.1 from 47.9, a 3 month high but below 50 for a 12th straight month. The Shanghai index was little changed in response.
II: Bulls 41.5 v 42.6 Bears 27.7 v 26.6