Market Affairs

Good Morning Everyone and Happy Thursday! Stocks are taking a breather this morning after 3 days of rallies. Monday and Wednesday were big gains for all 3 markets, and the Dow is now up 6% since this weekend! With such a huge run in such a short amount of time, traders are concerned that selling will take place to snatch up quick profits. We’ve talked about how this week might be a volatile one, and it’s never so true as it is today, lots of choppiness in the market.

Stocks should have had another banner day after JPMorgan Chase reported stellar earnings of $0.28 a share when analysts were expecting $0.04. We knew earnings were going to be good, with all the refinances of late, and apparently so did traders. The stock has been up 10% recently, so when the earnings report did finally come out, there is no positive reaction on the stock price. B of A and Citi report tomorrow.

Initial jobless claims dropped for the week ending July 11 at 522,000. This number is not only better than expectations, but is the 2nd week now of declining figures. The continuing claims finally crested also it appears and came in at 6.27 million, less than the 6.85 million expected, and less than the 6.92 million revised number from last week. This should have had a much bigger positive reaction, but I guess equity traders are nervous about running up the markets too fast, or just plain wore out.

Credit markets are benefitting from the flatness in equity markets today. We have just been clobbered for the last 3 days in credit markets, so it’s good to finally get a little relief. The MBS delivery rate hit a whoppin’ 4.95% yesterday, but has settled down this morning to 4.91%. Pricing is slightly worse than yesterday morning’s pricing, which I guess is good news considering the pounding we got yesterday. Again, it’s hard to predict anything in this wild earnings season, so we’ll all just have to be spectators for the next couple weeks and take whatever good moves in our direction that we can get.
I’ll be here in the office all day today . . . call me here if you need me, and have a terrific Thursday!


Warmly,
The Ara Melkonians TEAM,
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