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Northwestern Mutual’s All-Time-High Dividend, Revenue and Surplus Underscore Company’s Exceptional Business Results and Financial Strength in 2023 Company reports historic growth in its field force of financial advisors, its highest-ever dividend, strong investment performance, exceptional financial strength, and rapid expansion of its wealth business – all positioning Northwestern Mutual for continued long-term success MILWAUKEE, Feb. … [Read more…]
It’s no wonder that Warren Buffett’s stock picks are of interest to investors. Buffett, after all, is widely considered the most successful investor in modern history.
And since he primarily invests through his publicly traded holding company, Berkshire Hathaway (BRK.B), information about Buffett’s stock purchases, sales and holdings — or more accurately, Berkshire Hathaway’s purchases, sales and holdings — is available for free, online.
The only catch is that you have to dig through Securities and Exchange Commission (SEC) filings to find it. Below, we’ve assembled a one-stop guide to Warren Buffett stocks — the companies Berkshire Hathaway has recently invested in or disinvested in, and the companies it’s currently holding.
Jump to learn:
Warren Buffett is a professional investor and the chairman of Berkshire Hathaway, a conglomerate that invests in (and sometimes acquires) undervalued companies.
Born in 1930 in Omaha, Nebraska, Buffett worked as a stockbroker in his early years. One of his early-career mentors was Benjamin Graham, an investment manager who pioneered the bargain-hunting approach to stock selection known as value investing.
When Buffett started his own investment partnership in 1956, he had $174,000 to his name
. Today, he’s worth more than $120 billion and is the seventh-richest person alive, largely thanks to the value investing strategies he learned from Graham .
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Berkshire Hathaway is Buffett’s investment company. It’s the full owner of many recognizable companies, including GEICO and Fruit of the Loom. Berkshire is also a major shareholder in many other publicly-traded companies, such as Apple (AAPL).
Berkshire Hathaway formed in 1955 through the merger of two textile companies founded in the 19th century. Buffett began buying shares in the company in 1962, believing that it was undervalued, and took full control of the company in 1965. He subsequently used it as a holding company for his other investments — first in the insurance industry, then in many others.
Berkshire has been publicly-traded since its pre-Buffett era, so it’s required to file quarterly reports with the SEC, detailing its investment activities. As a result, Buffett’s investment decisions have been a matter of public record for most of his career. Its next quarterly report is due on Feb. 26, 2024.
Berkshire Hathaway shares trade in two classes. The Class A shares have never undergone a stock split in their many decades of growth. As a result, they’re some of the highest-priced shares in the world, trading for just under $600,000 each as of Feb. 2024. That made them difficult to access for many investors before online brokers began offering fractional shares.
To mitigate this, the company also offers Class B shares that trade at a much more reasonable price — slightly less than $400 as of Feb. 2024.
In 1965, Buffett began writing an annual letter to Berkshire shareholders in which he explains the rationale behind Berkshire’s investment decisions. Those letters, along with Berkshire’s quarterly SEC filings, are the sources for much of the information in this article.
In the most recent quarter, Berkshire Hathaway disclosed new investments in four different stocks, and they’re listed below in order of purchase value. However, two of these stocks are closely related to each other. The company did not add to any of its preexisting holdings this quarter.
Company name and symbol |
Value of position |
|
---|---|---|
Liberty Live Group — Series C (LLYVK) |
New portfolio addition. Liberty Live Group is a division of Liberty Media Corp. consisting of its investments in Live Nation (LYV). |
|
Liberty Live Group — Series A (LLYVA) |
New portfolio addition. |
|
Sirius XM Holdings (SIRI) |
New portfolio addition. |
|
Atlanta Braves Holdings Inc. — Series C (BATRK) |
New portfolio addition. |
Source: 13F.info. Data is current as of Feb. 6, 2024 and for informational purposes only.
It’s worth clarifying some potential points of confusion here: Liberty Media Corp. is itself a holding company, much like Berkshire Hathaway. It has few operations of its own, and primarily makes money by investing in other companies.
Liberty is split into multiple divisions, each of which mainly consists of an investment interest in a specific company. Liberty Live Group, for example, consists of shares of Live Nation and a few other minor investments.
Each of Liberty’s divisions has also issued several different “series” of stock, and each of these series trades separately under a different ticker symbol. Berkshire bought two different stock series of Liberty Live Group last quarter.
Berkshire also bought two different series of a different Liberty division, Liberty SiriusXM Group (LSXMA and LSXMK), but it did so after selling the same number of shares of each series — meaning that its net share count for its two Liberty SiriusXM Group series did not change. Those investment positions are detailed in the “holdings” table below.
Atlanta Braves Holdings, another new Berkshire Hathaway purchase last quarter, also uses a multiple-series trading structure, although Berkshire only bought one series of that stock.
Berkshire Hathaway sold all of its shares in seven companies last quarter, and reduced its share count for another six stocks. They’re listed below in order of percentage sold and value sold.
Company name and symbol |
Value sold |
Percentage of shares sold |
---|---|---|
Activision Blizzard (ATVI) |
||
General Motors (GM) |
||
Celanese Corp. (CE) |
||
Johnson & Johnson (JNJ) |
||
Procter & Gamble (PG) |
||
Mondelez International (MDLZ) |
||
United Parcel Service (UPS) |
||
Globe Life (GL) |
||
Markel Corp. (MKL) |
||
HP Inc. (HPQ) |
||
Chevron Corp. (CVX) |
||
Aon plc (AON) |
||
Source: 13F.info. Data is current as of Feb. 6, 2024 and for informational purposes only.
After those purchases and sales, Berkshire Hathaway has a total of 45 stocks in its portfolio. They’re listed below in order of the dollar value of Berkshire’s holdings.
Company name and symbol |
||
---|---|---|
Bank of America (BAC) |
||
American Express (AXP) |
||
Coca-Cola Co. (KO) |
||
Chevron Corp. (CVX) |
Last quarter, Berkshire Hathaway reduced its share count by 10%. |
|
Occidental Petroleum Corp. (OXY) |
||
Kraft Heinz (KHC) |
||
Moody’s Corp. (MCO) |
||
Davita Inc. (DVA) |
||
HP Inc. (HPQ) |
Last quarter, Berkshire Hathaway reduced its share count by 15%. |
|
VeriSign Inc. (VRSN) |
||
Citigroup Inc. (C) |
||
Kroger Co. (KR) |
||
Visa Inc. (V) |
||
Charter Communications (CHTR) |
||
Mastercard Inc. (MA) |
||
Aon plc (AON) |
Last quarter, Berkshire Hathaway reduced its share count by 5%. |
|
Last quarter, Berkshire Hathaway reduced its share count by 5%. |
||
Capital One (COF) |
||
Paramount Global (PARA) |
||
Liberty SiriusXM Group — Series C (LSXMK) |
Last quarter, Berkshire Hathaway sold its previous position of 43M shares for $1.4B, but then bought the same number of shares for $1.1B, for a net decrease of $314M and zero shares. Liberty SiriusXM Group is a division of Liberty Media Corp. consisting of Liberty’s investments in SiriusXM (SIRI). |
|
Snowflake Inc. (SNOW) |
||
Nu Holdings (NU) |
||
Ally Financial (ALLY) |
||
T-Mobile US (TMUS) |
||
D.R. Horton (DHI) |
||
Liberty SiriusXM Group — Series A (LSXMA) |
Last quarter, Berkshire Hathaway sold its previous position of 20M shares for $663M, but then bought the same number of shares for $514M, for a net decrease of $149M and zero shares. |
|
Liberty Formula One Group — Series C (FWONK) |
Liberty Formula One Group is a division of Liberty Media Corp. consisting of Liberty’s stake in F1 and Quint, along with several other minor investments. |
|
Floor & Decor (FND) |
||
Louisiana-Pacific Corp. (LPX) |
||
Liberty Live Group — Series C (LLYVK) |
New portfolio addition. |
|
Markel Corp. (MKL) |
Last quarter, Berkshire Hathaway reduced its share count by 66%. |
|
Liberty Live Group — Series A (LLYVA) |
New portfolio addition. |
|
StoneCo Ltd. (STNE) |
||
Globe Life (GL) |
Last quarter, Berkshire Hathaway reduced its share count by 67%. |
|
NVR Inc. (NVR) |
||
Sirius XM Holdings (SIRI) |
New portfolio addition. |
|
Diageo plc (DEO) |
||
Liberty Latin America — Class A (LILA) |
Liberty Latin America is a division of Liberty Media Corp. that invests in telecommunications companies throughout Latin America and the Carribean. |
|
Vanguard 500 Index Fund (VOO) |
S&P 500 index fund. |
|
S&P 500 index fund. |
||
Jeffries Financial Group (JEF) |
||
Lennar Corp. — Class B (LEN) |
||
Liberty Latin America — Class C (LILAK) |
||
Atlanta Braves Holdings Inc. — Series C (BATRK) |
New portfolio addition. |
Source: 13F.info. Data is current as of Feb. 6, 2024 and for informational purposes only.
That depends on what you mean by “trading like Warren Buffett.” There’s a big difference between learning from Buffett’s methods and literally copying his trades.
Almost anyone can imitate Buffett’s methodology, which is rooted in value investing. Value investors look for undervalued stocks whose price-to-earnings (PE) ratio, or other valuation ratios, are lower than those of their peers (implying that these stocks are trading at a discount to their true value).
Buffett famously remarked in his 1989 letter to Berkshire Hathaway shareholders that “it’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price
.”
History seems to vindicate Buffett’s bargain-hunting approach — especially during periods of high interest rates. A 2020 paper by economists at Dartmouth College and the University of Chicago compared value stock returns with benchmark stock market returns between 1963 and 2019.
The study authors stopped short of proving a causal relationship between interest rates and value stock returns. But they did find that value stocks had a significant advantage over the market as a whole during the first half of the study period, 1963 to 1991, when the federal funds rate was higher than its long-term average
. The federal funds rate is also above-average now.
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Buffett is also an advocate for long-term investments. As he wrote in his 1988 letter to shareholders: “When we own portions of outstanding businesses with outstanding managements, our favorite holding period is forever. We are just the opposite of those who hurry to sell and book profits when companies perform well but who tenaciously hang on to businesses that disappoint
.”
Buffett may be a good role model for investors, but that doesn’t mean it’s a good idea to replicate his exact investment decisions.
“Copy trading,” as this practice is known, can be risky. The best investments for you will depend on your circumstances and goals, and may not be the same as the best investments for a famous billionaire.
Researchers are skeptical about the efficacy of copy trading. A 2020 paper published in the Management Science journal found that “copy trading leads to excessive risk taking” among investors
.
To summarize, it’s not a bad idea for investors to familiarize themselves with Buffett’s buy-and-hold value investing philosophy. But if you’re buying the exact same stocks as him, just because he did, you may be missing the point of his methods.
Neither the author nor editor owned shares in the aforementioned investments at the time of publication.
Source: nerdwallet.com
Refinancing activity rebounded for the week ending February 2 after declining the previous week, as mortgage rates stabilize in the under-7 percent level, contributing to a rise in home loans application, the Mortgage Bankers Association (MBA) said on Wednesday.
The Refinance Index jumped 12 percent from the week before February and also rose by a percent compared to one year ago, according to MBA. Meanwhile, mortgage applications jumped by nearly 4 percent in the same time span.
The average cost of a 30-year fixed rate mortgage for a loan of $766,550 ticked up slightly to 6.80 percent compared to 6.78 the previous week.
“Mortgage rates have stayed close to where they started the year, despite swings in Treasury yields because of slowing inflation offset by stronger than expected readings on the job market,” Joel Kan, MBA’s deputy chief economist, said in a statement shared with Newsweek. “Rates at these levels have not prompted much of a reaction in the refinance market, as most homeowners have mortgages with much lower rates.”
Mortgage rates peaked at about 8 percent in the fall of 2023, making the cost of a home loan the highest it had been since the turn of the century. The elevated rate environment discouraged both buyers and sellers to step into the housing market who were reluctant to incur higher monthly payments of their housing loan.
Part of the reason rates jumped so high was due to the Federal Reserve’s hiking of its funds rate to battle soaring inflation. The rise in prices is cooling giving confidence that policymakers will slash rates but a strong jobs market is creating uncertainty on how quickly those cuts will happen.
But to begin the year, there is evidence that buyers are showing interest in dipping into the housing market, according to real estate platform Redfin, as rates have fallen over the last few weeks.
Redfin’s Homebuyer Demand Index, which tracks requests for tours, went up 6 percent for the week ending January 28, the platform said. Real estate agents say, however, that that increase in interest has yet to translate to a substantial jump in sales.
MBA experts are seeing a similar bubbling up of buyer interest.
“Purchase activity has been strong to start 2024 compared to the final quarter of 2023. However, activity is still weaker than a year ago because of low housing supply,” MBA’s Kan said.
Supply of homes is a huge challenge for the housing market. Housing economists have told Newsweek in the past that the market is 4 million homes short of demand, contributing to a jump in prices.
Some economists suggest that as mortgage rates fall, the used homes market may pick-up as sellers would begin to come out of the sidelines and finally put their homes in the market.
“Once they start moving, and I suspect we’ll see more and more of those folks moving in the coming year, they’ll have to become somewhat aggressive on pricing, they’re going to have to lower their price,” Mark Zandi, chief economist at Moody’s Analytics, told Newsweek last week.
Newsweek is committed to challenging conventional wisdom and finding connections in the search for common ground.
Newsweek is committed to challenging conventional wisdom and finding connections in the search for common ground.
Source: newsweek.com
After rising roughly 2bps yesterday afternoon, bond yields dropped just over 2bps right at the start of the overnight session with buzz surrounding Moody’s downgrade of NYCB. The energy behind the rally was tepid, at best, which may have been our first clue that overnight trading makes no guarantees. NYCB would go on to rally sharply in pre-market trading with traders ostensibly focusing on a leadership change as well as comments regarding an absence of big withdrawal flows. With that, the fuel for the overnight bond rally evaporated and bonds pushed modestly into weaker territory. From here, the focus is on the 1pm auction of 10yr Treasuries–the largest ever.
Source: mortgagenewsdaily.com
FORTUNE honors company with strong rankings in social responsibility, quality of management, financial soundness and quality of products and services based on annual survey MILWAUKEE, Jan. 31, 2024 /PRNewswire/ — Northwestern Mutual has been named one of the World’s Most Admired Companies by FORTUNE magazine – a prestigious recognition the company has earned for several years. … [Read more…]
Schlifske’s 14-year tenure as CEO defined by historic business performance, bold client experience transformation, unsurpassed financial strength, exceptional product value, and meaningful investments in talent and diversity Tim Gerend to succeed Schlifske as the company’s next CEO, effective January 1, 2025 MILWAUKEE, Jan. 25, 2024 /PRNewswire/ — After 14 years as Northwestern Mutual’s Chief Executive … [Read more…]
Mortgage giant Mr. Cooper has tapped Mike Weinbach, a veteran banking executive, as president following current leader Chris Marshall’s expected retirement at the end of this year.
Weinbach, the longtime CEO of Chase Home Lending and former CEO of consumer lending at Wells Fargo, will begin his role Feb. 1, Mr. Cooper announced Tuesday. Marshall, also the company’s vice chairman, will remain onboard to assist with the transition and lead fundraising for Mr. Cooper’s mortgage servicing rights fund.
“I have long admired Mr. Cooper’s impressive record of growth and profitability as well as their commitment to the customer experience, and I am thrilled to hit the ground running with this fantastic team,” said Weinbach in a press release.
Company chairman and CEO Jay Bray in a statement commended Weinbach’s background in consumer lending. Weinbach worked at JPMorgan Chase from 2003 through 2020, heading mortgage operations in his final five years there. He worked in the newly-created consumer lending role at Wells from 2020 to 2022, overseeing the launch of a new portfolio of credit cards.
The incoming president will oversee Mr. Cooper’s originations, servicing and technology efforts. Weinbach steps in at a critical time for the publicly traded giant, following a massive data breach in November exposing the Social Security numbers of over 14 million customers. The incident has spawned over a dozen class action lawsuits from consumers, while Moody’s in November suggested the incident could impact the firm’s creditworthiness.
The company reported strong earnings in the third quarter, posting net income of $275 million, nearly double the amount of its second quarter results. Bray, at the time of the earnings and Marshall’s retirement announcement in October, credited Marshall for implementing “bank-like” efficiencies to the company during the pandemic.
Kurt Johnson, Mr. Cooper’s executive vice president and chief financial officer, then anticipated gains in owned servicing moving forward. As part of the firm’s busy 2023, it closed in August on the acquisition of the servicing business of Home Point Capital. That transaction added $83 billion in MSRs to bring Mr. Cooper’s servicing portfolio closer to $1 trillion.
Source: nationalmortgagenews.com
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This morning I head to Kansas, greeted by the news that Southwest is raising drink fees for the holidays. Has the “Let’s circle back after the holidays” season officially begun in your office or in your meetings with vendors? Chortles aside, one of the discussion topics in KC will certainly be the impending move in credit prices as lenders everywhere move toward charging borrowers up front. Whether the cost change is driven by Fair Isacc or the credit bureaus, and then being passed along by the CRAs, it doesn’t matter. It’s coming, and the jungle drums are saying the price changes will impact soft credit pulls, which (or course) many lenders implemented to reduce their costs with the amount of credit reports run as it’s cheaper than the full hard credit pull. Some lenders may use Freddie or Fannie AUS. (Today’s podcast can be found here, sponsored by LoanCare, the mortgage subservicer known for delivering superior customer experience through personalization and convenience. Its award-winning portfolio management tool, LoanCare Analytics, supports MSR investors with a focus on customer engagement, liquidity, and credit risk. Hear an interview with Polunsky Beitel Green’s Peter Idziak on the direction of mortgage interest rates in the months and year ahead, and what to make of the NAR case verdict’s impact on the home buying process.)
Lender and Broker Software, Products, and Services
Housing authorities rolled out 54 down payment assistance (DPA) programs in Q3 and are funding buydowns, and certain loan fees to offset the home affordability crisis. That’s according to Down Payment Resource’s (DPR) Q3 2023 HPI Report. In fact, 50 new agencies began offering programs last quarter alone. Prospective homebuyers are being hammered with news about affordability being in the dumps, but what they aren’t hearing is that there are thousands of DPA programs to help. With DPR, you can be the bearer of good news, while using DPA to salvage DTI ratios as interest rates go up. As the industry authority on DPA solutions, DPR tracks the eligibility, benefit, and guideline data of the nation’s 2,200+ assistance programs. Learn how DPR’s integrated toolset makes it easy to operationalize DPA across departments and geographies. Schedule a demo today.
Strength, stability, and proven performance are essential in the mortgage space. Flagstar Bank has been checking all the boxes for 35 years, leading the way with more than $111 billion in assets, diverse product offerings, and consistently delivering excellent service. As the nation’s second largest warehouse lender with a team of a dozen dedicated relationship managers, you can count on Flagstar to handle your business with care. They warehouse most loan types, including conventional, non-QM, and construction, with a platform designed for quick and easy funding solutions for their 400 warehouse clients. Flagstar’s expertise also covers MSR, servicer advance, and EBO financing solutions, all of which they can tailor to meet your business needs. Their specialized mortgage banking team can even help streamline your operations and maximize the value of your cash balances. Flagstar is the ultimate one-stop-mortgage shop for lenders of all sizes. Contact Patti Robins or Jeff Neufeld today to learn firsthand why Flagstar should be your top choice.
Don’t let inaccurate home values harm your customer experience! When Hitch, a digital HELOC provider, found that the AVM it used to assess the value of a client’s home and deliver an estimated HELOC limit was off by up to $100,000, it sought a better solution. Hitch upgraded to a lending-grade, industry-leading AVM and boosted valuation accuracy, enhanced customer experience, and approved 30 percent more loans. Discover how Hitch transformed their HELOC lending operation to improve customer experience and internal efficiencies with ClearAVM™. Read the full case study to learn more.
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Equity is an untapped $18T (yes, trillion!) opportunity for mortgage lenders. That’s because most homeowners aren’t actively monitoring their equity level or making plans for how to use it. And, until now, the challenge for lenders has been identifying equity-rich contacts and engaging them with personalized communications that help them understand their options. Total Expert Customer Intelligence creates enriched contact profiles so loan officers can help homeowners understand their options for leveraging home equity and provide the guidance and support they need to reach their financial goals. Download our Equity Enrichment Guide to learn more.
In mortgage lending, speed matters. Consumers are more likely to buy from the company that responds to their inquiry first. ICE helps lenders answer the demand for instant availability with Surefire℠ CRM and Mortgage Marketing Engine Power Messaging. The feature sets LOs up to win by instantly responding to any lead, from any source, via text message. Here’s another stat for you: text messages enjoy a whopping 97 percent open rate within 15 minutes of being delivered, far surpassing the performance of email marketing. To discover how Surefire automated multichannel marketing campaigns can help you convert more leads to closed loans, schedule a demo with the ICE team today.
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Reflecting on her decision to adopt Polly’s cloud-native, high-performance PPE, Kristin Ankeny Bickenbach, SVP of Secondary Marketing at New American Funding, said: “Back in the second half of last year, we knew the mortgage industry was in for a challenging 2023. I was asking myself: ‘How can we maximize our responsiveness? How can we be creative and position ourselves for success in an incredibly challenging market?’ As a sales-focused organization, I knew we needed a sharp PPE to enable us to act decisively and with precision, which is ultimately what led me to Polly.” NAF partnered with Polly as they sought to navigate the complexities of an increasingly dynamic market using a modern and proven engine that would grant access to the most sophisticated data science and machine learning tools available. Click here to read the press release. Looking for even more detail?! Request the NAF case study: [email protected].
Listings!
Want some good news? Altos Research reports that as of November 10th, inventory was at 567,000. Meanwhile, the St. Louis Fed, the source of some great information, pegs the active listing count at 737,000 and it is rising. This is still only about 7 listings for every real estate brokerage firm out there. I am too lazy to figure out the difference between the two stats.
Government Program Updates
FHA Press Release, HUD No. 23-257, describes FHA’s proposal to allow assignment of the HECM when its due and payable status is based on the death of all borrowers and non-borrowing spouses. HECMs that are due and payable are not eligible for assignment to the Secretary unless there is a non-borrowing spouse in a deferral period. FHA posted a draft Mortgagee Letter (ML), Updates to Home Equity Conversion Mortgage (HECM) Assignment Eligibility, on its Single-Family Housing Drafting Table (Drafting Table) web page for public feedback.
On October 16, 2023, FHA published Mortgagee Letter (ML) 2023-17, Revisions to Rental Income Policies, Property Eligibility, and Appraisal Protocols for Accessory Dwelling Units, which provided expanded financing options for borrowers seeking to purchase properties with an existing accessory dwelling unit (ADU), rehabilitate existing structures to add ADUs, or construct new homes with ADUs. To support changes announced in the ML, FHA is enhancing its FHA Connection (FHAC) system.
FHA published extensions to its temporary regulatory waiver and related Single Family Housing Policy Handbook 4000.1 (Handbook 4000.1) waiver, which allow mortgagees to utilize alternative methods for conducting meetings with borrowers in accordance with FHA’s early default intervention requirements. These alternatives provide practical and useful methods for conducting non-contact interviews with borrowers while ensuring they still receive needed information directly from their mortgage servicer. FHA initially published temporary partial waivers of these requirements on March 13, 2020, and previously extended them through December 31, 2023. FHA is now extending the waivers through May 31, 2024. For the details, read the temporary regulatory waiver and Handbook 4000.1 waiver.
Ginnie Mae’s APM 23-12 provides information on the December 1, 2023 deadline for the complete transition of all Single Family and Manufactured Housing Program pooling to the new Single Family Pool Delivery Module (SFPDM) and the establishment of SFPDM as the sole application for this type of pooling going forward, As part of this transition and further modernization of the Mortgage-Backed Securities (MBS) programs, the APM also outlines the discontinuation of paper pooling options for Single Family and Manufactured Housing Issuers. The MBS Guide has been revised to incorporate these updated policies and operational requirements.
For the 2023 calendar year to date, Ginnie Mae supported the pooling and securitization of more than 520,000 first-time homebuyer loans. According to Ginnie Mae Press Releases post,
Ginnie Mae Mortgage-Backed Securities Portfolio reached $2.492 Trillion in October. For more information on monthly MBS issuance, Unpaid Principal Balance (UPB), real estate investment conduit (REMIC) monthly issuance, and global market analysis, visit Ginnie Mae Disclosure.
On October 16, 2023, FHA published ML-2023-17, establishing guidelines for consideration of rental income in underwriting and protocols for the Appraiser’s analysis and reporting of Accessory Dwelling Unit (ADU) market rent on appraisals. Applicability to AmeriHome requirements are posted in AmeriHome Mortgage Announcement Number: 20231101-CL.
Capital Markets
Recall that last week closed with investors digesting “hawkish” rhetoric from Fed Chair Powell, though MBS and Treasuries rebounded on Friday from Thursday’s auction-driven slide. Even with Fed Chair Powell once again dashing investor hopes of the Fed easing policy in the near term, stating that the FOMC would leave the door open for additional rate hikes should economic data show inflation remains elevated, it’s safe to say that the U.S. economy has entered a “wait-and-see” period.
Ahead of today’s highly anticipated October CPI report, the New York Fed’s Survey of Consumer Expectations yesterday showed a decline in one-year and five-year ahead inflation expectations, which conflicted with Friday’s UMich Sentiment Survey showing increasing inflation expectations amongst consumers. Regardless, Treasuries also digested a Moody’s downgrade of the U.S. credit outlook to negative from stable reasonably well. Moody’s on Friday cited the mounting debt and the rising cost of servicing that debt. With several Federal Reserve officials warning investors last week that additional rate hikes may lay ahead, investors opened the week looking ahead to today’s October CPI report, where analysts anticipated that the annualized headline reading would drop to 3.3 percent from 3.7 percent previously.
Today’s economic calendar kicked off with NFIB small business optimism for October before the all-important October CPI report. Headline CPI was flat, up 3.2 percent year over year. The core rate, ex food and energy, was up .2 percent for the month and +4.0 percent year over year. Several Fed speakers are also scheduled, including Vice Chair Jefferson, Vice Chair of Supervision Barr, Cleveland President Mester, and Chicago President Goolsbee. We begin the day with Agency MBS prices better from Friday by .250-.375 and the 10-year yielding 4.49 after closing Friday at 4.63 percent after a stellar CPI number.
Employment
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Movement Mortgage has experienced a 300 percent year over year growth in reverse mortgage business in 2023! Earlier this year Movement brought in the most experienced reverse mortgage team in the nation who have dedicated their careers to reverse sales and operations. Plus, Movement has set its loan officers up for success with a reverse-eligible borrower dashboard in MORE, Movement’s new sales and marketing platform powered by Salesforce. Movement LOs can now identify reverse-eligible borrowers from their previous and current loans to offer this incredibly powerful product. Click here to learn more about reverse mortgages at Movement.
A veteran group of mortgage bankers is interested in purchasing a small wholesaler in good standing and that has its “tickets” with Fannie, Freddie, and Ginnie. Loan production volume is not a priority. Interested parties should send me a confidential note for forwarding.
Mobility Market Intelligence (MMI) announced Brian McKray has been promoted to Vice President of Product. DepthPR writes, “His efforts in spearheading the development and implementation of MMI’s user insights tool and custom dashboard hub have fueled this promotion. Using these customer insights, MMI is actively building improved in-app onboarding and support tools.”
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Source: mortgagenewsdaily.com
Northwestern Mutual to Deliver Record-Setting $7.3 Billion in Dividends to Policyowners More than $150 billion paid in dividends throughout company history MILWAUKEE, Sept. 28, 2023 /PRNewswire/ — Northwestern Mutual announced today that it will continue its longstanding tradition of awarding its policyowners a record-setting and industry-leading annual dividend – a sum expected to reach $7.3 billion in … [Read more…]
Federal student loan payments resuming on Oct. 1 will negatively affect consumer loan asset quality, including credit card, auto and, to a lesser extent, residential mortgages. However, the overall effect will be modest, according to a Moody’s Analytics report.
On Oct. 1, repayments are due to restart on Department of Education (DOE) federal student loans (Direct Student Loans), which began accruing interest again on Sept. 1.
In total, 24 million borrowers whose payments were suspended since the onset of the COVID-19 pandemic will owe an average of $275 per month when federal student loan payments resume, per Moody’s Analytics estimates.
“As the interest burden on student debt increases, we expect the additional financial obligation will modestly strain borrowers’ ability to pay,” Moody’s analysts said in a report.
According to the analysts, job market conditions remain the primary driver of consumer loan performance. In August, the unemployment rate was 3.8%, compared to 3.5% in July. Although it’s a low rate by historical standards, unemployment is at its highest level since February 2022.
“Although student loans are non-dischargeable in bankruptcy, their priority in a consumer’s debt repayment hierarchy is low relative to the other major consumer debt classes,” Moody’s analysts said.
They added: “Borrowers are much more likely to prioritize servicing mortgage or auto loans and even credit cards since they stand to lose their house or car or access to credit or credit card rewards if they fall behind on such consumer loans.”
The report included data showing that delinquencies in major consumer debt classes are rising but are still at low levels.
For mortgage debt, the share of performing loans that were 30 or more days delinquent went from less than 2% in Q3 2021 to about 2.5% in Q2 2023. Credit card delinquencies jumped from 4% to about 7% in the same period. Meanwhile, auto loans rose from about 5% to 7%.
Source: housingwire.com