Final Update/ Week of November 30 2009

Good Afternoon Everyone and Happy Friday! I woke up this morning and went right to the computer to await the results on the unemployment report. The run up in equities was nice to see, but for the past 7 months we’ve watched the equity markets post month over month gains with little affect on interest rates. In fact, the market has never been so high (all year) as it has in the last several weeks, and rates have been as low as they have been all year. Today that is not the case. Pretty disappointing if you have a loan right on the cusp of getting locked. As I drove to work I listened to the every-10-minute market update and monitored by radio the market dropping into negative territory. Credit markets are improving, too!

The official Unemployment Report from the Labor Dept this morning created some very happy momentum for equity markets. The Labor Dept reported that the unemployment figure for November actually dropped to 10.0% from the 10.2% posted for October. In October our revised figure showed a loss of 111,000 jobs off non farm payrolls. The total net job losses for November was a paltry 11,000 – about 1/10th of the 125K anticipated by the experts. This also flies in the face of the ADP report we just rec’d on Wednesday which told us that private companies laid off 169K workers in November. Crazy. Keep in mind that many retailers were ramping up their sales staff for the holidays and many of these jobs will be let go in January. Maybe this is the reason for the quick drop in stock prices after an impressive start.

Gold is plunging – almost $50 an ounce and the dollar is rallying. Unemployment is a big concern, as we all know, and it’s only good news for almost everyone interested in the financial stability of our country to see this problem dissipate. There’s already talk of the Fed’s raising interest rates, but I think they’ll wait for the Spring to see how we look on the job scene at that time. Remember, companies are not going to be quick about hiring back full time workers. They’re going to over work their present staff first, then hire temps . . . then hire full time workers. This whole cycle could take several if not many months to play out.

Rates are off once again from yesterday’s rate sheet by anywhere from (.500) to (.750) in rebate. Let’s enjoy the breather, I suspect rates will drop back down next week. The stock market truly seems to be out of steam, but don’t look for a correction before New Year’s Eve. I’ll be in the office all day today. Call me here or better yet email me if I can help you. Have a terrific Friday and a very restful and relaxing weekend!