Update #3/ Week of October 26, 2009

Good Morning Everyone and Happy Wednesday! Stocks are struggling once again this morning following a global sell off that took place last night. All markets around the globe were off last night and this morning, except Sydney Australia (gotta hand it to those Aussies). Most international markets were off over 1%. It’s our turn again and the 50+ point loss on the Dow isn’t as noticeable as the nearly 40 point loss on the NASDAQ. This represents an almost 2% drop for the “tech-heavy” NASDAQ after a 1.2% drop yesterday and a .6% drop on Monday. Not huge numbers, but the NASDAQ in particular is off almost 5% from it’s high on 10/19 of 2,176. If today turns out to be a down day for this index, it will be the 6th out of the last 7 trading days that have been losers.

As equity markets trend downward, credit markets are finally reaping some of the benefits. We had an exceptional day yesterday in bond land and the rally continues this morning. We have a ways to go to make up the losses from the last couple weeks, but we seem to be well on our way. Many “experts” in the market place are looking for at least a 10% drop in the stock markets, and we’re not quite at 5% yet. Yesterday’s bond auction of 2-year T’s went well, and it was a big one too -- $44B! Today’s 5-year T’s auction results will be announced at 10:00 . . . in 10 mins.

Bullish traders tried to use the durable goods orders report early on to help rebound the market. Durable goods orders for September increased 1.0% -- in line with expectations. Augusts’ orders were revised downward, though, to a drop of 2.6%. So this month’s number ended up being a nice little pop for that industry. The market took a real turn when New Home Sales for September report was released which show a drop of 38K from it’s annualized pace of 440K units last posted in August. This was a bit of a surprise since the existing home sales numbers were so good earlier and much of the credit was being given to the soon to expire tax credit. Somehow this tax credit didn’t provide as much booster fuel for new home sales as hoped.

Good news is, pricing is about .250 to .375 better in fee than yesterday morning’s rate sheet. I will be in the office all day today. Call me here or better yet email me with your loan scenario or pricing questions. Have terrific Humpday!