FINANCIAL Update #5/ Week of July 13, 2009

Good Morning Everyone and Happy Friday! Equity markets are choppy once again with the Dow all over the place around the flat line. Presently it’s up about 10 points, but it’s been down just as much just minutes ago. The Dow is pressing up against the resistance line of 8776, that magic number at which the Dow closed out 2008. We hit this ceiling back on June 12 and then fell back about 800 points. Here we are again and traders are anxious to see if we can break through and sky higher.

While the stock market tries to find some footing, credit markets are in cautious mode awaiting a big end of the day run up like we saw yesterday. Our pricing is off about ½ of an .125 in rebate from yesterday morning’s pricing. This morning’s economic news centers around earnings reports from IBM (yesterday after the bell), Citigroup, Bank of America and Google. All beat expectations, and of course, all had rosy outlooks for the rest of this year.

The only real economic report this morning is housing starts for June with came in at 582,000 – higher than the 530K expected. Housing starts for May were revised upwardly to 562K, and building permits for June also rose more than expected. Housing sales numbers have been up, possibly due the tax incentive for 1st time homebuyers, but in California that money is gone, so that may be slowing up. Also, there’s a lot of talk this morning of unemployment as it was reported that we have hit 11.6% in CA, not as high as 15% in Michigan, though. CA, of course, leads the nation in most job losses, 66K in June.

OK, with pricing mixed and the phone pretty quiet today, I’ll be leaving the office shortly after lunch. Catch me early if you need me, and have a terrific Friday . . . and a very restful and relaxing weekend!