Financial Update #4 (of 5)/ Week of August 31, 2009

Good Morning Everyone and Happy Thursday! Markets have been pretty flat the last couple days, presently the Dow is up 30 points making up its loss of 30 points yesterday. Credit markets improved yesterday throughout the day, but are giving back some of their gains this morning. We’re about (.125) worse on rebate this morning than we were yesterday morning at this time. Don’t look for investors to be real aggressive with pricing going into a 3-day weekend. Coming off a 3-day weekend, though, is a much different story, but we’ll have to see how that all plays out next week.

Early this morning the Shanghai Composite Index, which made big news on Monday when it dropped 7%, made up a huge portion of their earlier losses with a rally which resulted in a 4.8% gain. Markets around the world have stabilized on this rally. US equity markets had a bit of a drop this morning when this week’s Initial Jobless Claims was reported at 570K. This is slightly higher than analysts’ expectations, but the Continuing Claims report showed a rise of 9 million from the week previous. These numbers are supposed to be dropping. Remember, employers will get as much out of their present workers as possible, we saw that yesterday with the productivity report. Then, when the economy starts coming back, they’ll higher temps and that will continue for months. It will be some time before employers start hiring full time employees again.

The August ISM Services Index came in at 48.4, still below the even 50 mark, but it’s this is the best reading in a year, and in line with expectations. As I mentioned above, most traders on the equity and credit markets are going to be setting their sights on the last weekend of the Summer soon, so volume will be light, and there shouldn’t be much movement today. We’re not completely clear for the weekend, though. Tomorrow’s unemployment report will likely have some impact on the markets, and rates.

I will be in the office all day to day. Email me or call me here at the office if I can help you out in any way. Have a terrific Thursday!