Update #3/ Week of August 3, 2009

Good Morning Everyone and Happy Wednesday! Maybe we’re finally seeing the beginning of the much anticipated pull back in the stock markets. All major indices are down this morning, from Asia to Europe to our own equity trading floors. Credit instruments are thus far not the beneficiaries. Pricing is reflective of yesterday’s and this morning’s early losses, and investors on the mortgage secondary marketing desks seem to be leaving themselves a little buffer this morning. Hopefully we’ll see some improvements throughout the day in rates and rebates.

We have an “equal and opposite” reaction happening today on Wall Street. Yesterday a few good news reports sent the stock markets into positive territory. Today’s reports aren’t quite so rosy, so the bears seem to be in control of Wall Street today. The July ADP Employment report came in with a loss of 371K jobs, worse than the 350K anticipated. This sets the stage for Friday’s official unemployment report for July from the Labor Dept., expected to be a loss of 328K jobs.

The ISM Service Index for July came in at 46.4 this morning, worse than the 48 expected. We saw the opposite thing happen earlier this week with the ISM Manufacturing numbers which were better than expected. The lone happy report today comes from June factory orders which came in with a .4% increase – far better than the .8% loss anticipated. Factory orders for May were revised lower, but this is a 3 month run for positive factory order numbers.

I’m in the office all day today . . . call me here or email me if I can help you in any way. Have a terrific Humpday!