Update #1/ Week of 11/29/2010 ARA MELKONIANS

Good Morning Everyone and Happy Monday! I hope all of you had a wonderful Thanksgiving holiday and are looking forward to a very busy and joyful Christmas season! We have a nice start to the week with credit markets in rally mode as equities struggle early this morning. The Dow had a losing week in last week's holiday-shortened trading -- losing 63 points. The NASDAQ actually gained 16 points. However, both are down almost 1.5% so far today.

Credit markets assumed the safety posture as usual around the holidays, but are settling down today and hopefully will continue to improve throughout the week. It appears to be global news that weighs on US stock markets this morning. First in the news is the $113 bail out extended to Ireland by the European Union. This would appear to be good news, but it simply highlights the problems in Europe and this news is bringing the euro down to its lowest level since mid September. European bourses are down anywhere from 1.5% to 2% as they head toward the close.

Tensions continue on the Korean Peninsula as South Korea rejected China's proposal for six-party talks and has pushed forward with joint naval exercises with the U.S. Retail stocks, like Amazon which is among today's top performing stocks, are reporting sales from Black Friday, and many are showing an increase in sales compared to the same day last year. It is estimated that up to 33% of holiday sales will occur online.

Home prices in the U.S. continued to fall in the 3rd qtr, with declines in most parts of the country, according to the Federal Housing Finance Agency. FHFA's purchase-only house price index is calculated from mortgages acquired by Fannie Mae and Freddie Mac. It showed a 1.6% drop in the third quarter when compared to the second. Analysts warn that we may be entering a double dip in home prices; however, this dip will be less severe than the first one.

A bright spot in today's mortgage related news comes from the Mortgage Bankers Association which reported Wednesday that its index of purchase applications soared 14.4% for the week ending November 19th. MBA says the increase suggests growing consumer confidence. It offset a 1.0% decline in applications for mortgage refinancing, which in contrast, hit their lowest mark since the end of June. Mortgage applications for home purchases jumped during the third week of November to their highest level since May.

I hope all of you have a terrific Monday and a very profitable and productive week!

ARA MELKONIANS

Update #3/ Week of 11/22/2010 News FROM ARA MELKONIANS

Good Morning Everyone and Happy Wednesday! We caught a little break yesterday with credit markets improving one extra day for the week. All bets were on credit markets moving well into a safe place ahead of the holiday, but with the help of some sabre-rattling in Korea, equities sold off yesterday and credit markets actually improved. Today, we're on the typical day-before-a-holiday program with credit markets way off into a safe place and back-East traders leaving the office to get a head start on the commute.

Helping stock markets make up the losses from yesterday is the Initial jobless claims report for the week ending Nov 20 which totaled 407K. This figure is down 34K week-over-week and less than the 442K initial claims that had been widely expected. Continuing claims came down to 4.18 million from 4.32 million. Both reports mark a 2 year low for this economic bell weather.

Separately, personal income increased 0.5% in October, besting expectations of an increase of 0.4% after no change was recorded for the prior month. Spending for October increased 0.4%, which is weaker than the 0.6% increase that had been expected to follow a 0.3% increase for the prior month. Core personal consumption expenditures were flat for October.

The final Consumer Sentiment Survey for November from the University of Michigan improved to 71.6 after a preliminary reading of 69.3. New home sales, however, for October fell 8.1% month-over-month to an annualized rate of 283K units, quite a miss from the rate of 314K units that had been expected. This housing news may have brought the early rally to a stop, but equity markets have pretty much made up the losses from yesterday, so they should be happy to take the gains and get out of town.

I hope all of you have a terrific Thanksgiving tomorrow with your family and friends!

Ara Melkonians

Update #3/ Week of 11/22/2010 NEWS FROM ARA MELKONIANS

Good Morning Everyone...We wrote last Friday about the stock market needing to generate even a small rally to finish the week in positive territory, and such was the case! The Dow rallied 22 points on Friday to end the week with an 11 point gain for the 5 day trading session . . . almost seems like a plot there somehow. However, on a happy note, credit markets did settle down a bit on Friday and we have a little rally going on this morning in Treasuries. Let's hope that continues!

The relative calm in commodities and credit markets may be a byproduct of news out of Ireland over the weekend which announced that it has applied for financial aid from the European Union. Specifics of the plan have yet to be hammered out, but the news initially spurred the euro higher and cut down the dollar. However, that trend has reversed itself now with the realization that the EU is still in financial instability. As such, the dollar has regained strength and has sent stocks into an opening slide downward.

We learned from CoreLogic over the weekend that their market index for home prices in the US has declined for two months in a row. This comes after a 7 month string of increases in the first 7 months of the year. The latest CoreLongic HPI shows that national home prices declined 2.79% in Sept 2010 compared to Sept 2009. This follows a 1.08% drop year-over-year in August. All but 7 states saw a decline in residential property in September. This is obviously the result of a languishing job market, the cessation of the gov't tax incentive and the foreclosure mess in which we find ourselves. This trend is not likely to improve any time soon.

There are no corporate reports due out today, and no economic news releases are expected. However, data will pick up in the next couple days as revisions to tQ3 GDP are released, data on existing home sales, durable goods orders, personal income and spending, weekly jobless claims, and new home sales are posted. Look for lots of action in the next couple days before markets close on Thursday for the holiday.

I hope all of you have terrific Monday and a very profitable and productive week!

Update #1/ Week of 10/18/2010/ COMMUNICATION FROM ARA MELKONIANS

Good Morning Everyone and Happy Monday! Last week was another positive week for the 3 major equity indices. The Dow continues its trek upward gaining altitude almost every week since Sept. 1st. Last week's gains were minimum -- less than half of 1%, but a positive number nonetheless. Friday's trading volume was robust amid all of headline news and the expiration of monthly options. The 1.4B shares traded on the NYSE was the 2nd highest total since July.

The NASDAQ is now up 200 points for the year, a gain of nearly 9%. This improvement for the NASDAQ in 2010 is largely due to Google's topping $600 a share and Apple's 49% gain in stock price this year, topping $300 a share last week. The Dow is up a whopping 678 points for 2010 representing a 6.5% improvement.

Also on Friday, former Countrywide Financial Chairman Angelo Mozilo and two defendants reached an agreement with federal regulators to settle civil fraud and insider-trading charges. The SEC alleged that the defendants hid from the public the problems in Countrywide's portfolio of risky sub prime loans. Those problems eventually forced the mortgage giant's 2008 sale to Bank of America, which isn't involved in the SEC suit. Mozilo agreed to $67.5 million in penalties and disgorged profits, the largest-ever settlement between the SEC and a public company's senior executive. It would be interesting to find out what portion of Mozilo's net worth is represented by $67.5M. Painful, I'm sure it was, but I doubt he'll have to sell the yacht to pay the penalty.

Earnings season continues this week with Citigroup posting better than expected earnings this morning. In economic news, the only report worth noting is the Industrial Production report which showed a decrease of 0.2%, which contrasts with the consensus call for a 0.2% increase. Treasuries, however, are rallying today and pricing should be improved over Friday on your favorite rate sheet this morning. Look for this trend in credit markets to continue through the first part of this week.

I hope you all have a terrific Monday and a very profitable and productive week!

Communication from ARA MELKONIANS/ Update #1/ Week of October 11, 2010

Good Morning Everyone and Happy Monday! It looks to be a very quiet day in equity markets this morning. There are no major economic news releases due out today, the Treasury market is closed for Columbus Day, and I have to expect that many traders are also taking advantage of the day off as many financial institutions are closed today as well. There are also no major corporate announcements or earnings reports due out today.
Last week ended up being a pretty good week for stock markets. The Dow closed up 176 points in the 5-day stretch, topping the 11,000 mark for the first time since the beginning of May. There's been no looking back for the Dow since the Sept 1 rally of 255 points. August 31st's closing at 10,015 compared to today's current reading of 11,015 means that the major index has risen 10% now in a month and 1/2 -- a pretty impressive 6 weeks! The NASDAQ tacked on 31 points last week, and the S&P posted a 19 point gain for the bulls.
Mortgage Rates remain steady…
I guess we'll have to wait until tomorrow to get things into full swing with the markets. I hope you all have a terrific Monday and a very profitable and productive week!

Communication from ARA MELKONIANS/ Week of October 4, 2010/ Final Weekly Update

Good Afternoon Everyone and Happy Friday! Earnings season unofficially kicked off yesterday after the stock markets closed. Alcoa reported better-than-expected results, which should generally be the pattern for this earnings season since companies have had a chance now to issue realistic guidance reports all year so far. There shouldn't be many surprises in the reports ahead, but it will be interesting to see how the markets react as the month of October plays out.
The much anticipated September nonfarm payrolls report was released earlier this morning which showed a drop of 95,000 jobs, which is in contrast to the call for no net change made by economists. Private payrolls however increased 64,000, which is less than the 74,000 increase that had been widely expected. The unemployment rate remained at 9.6%, despite predictions for a rise to 9.7%. So all in all, the unemployment rate stayed the same, no reason for worry out there, right?
Traders are shrugging off the Labor Dept's report as a "not as bad as it could have been" event and all markets are rallying at this time. The Dow is up over 50 points, commodities are up across the board and Treasuries are rallying, too! The 10 year note yield is at 2.34%, the lowest in over a year.
Freddie Mac (FHLMC) reported this morning that their owner occupied thirty-year fixed mortgages slipped to 4.27% this week, the lowest on records dating back to 1971, from 4.32 percent last week. I'm thinkin' we're going to see another record next week, what do you think? This is certainly a great time to be in the business for those of us survivors.
And as always . . . I hope you all have a terrific Friday and a very restful and relaxing weekend!

Communication From ARA MELKONIANS/ Final Update/ Week of September 27, 2010

Good Afternoon Everyone and Happy Friday! The Dow Jones Industrial Average successfully posted its best September in 71 years as it closed with a 47 point loss yesterday. This is the best month for the stock market since April of 2009. The bulls are trying to get a rockin' start to the new month and new quarter early this morning, but have hit some resistance in the last hour.

Personal income for August increased 0.5%, which is greater than the 0.3% increase that had been expected. Income in the prior month increased 0.2%. Spending for September increased 0.4%, which is greater than the 0.3% increase that had been widely expected, but consistent with the 0.4% increase of the prior month. Also consistent with the prior month, core personal consumption expenditures increased 0.1% month-over-month, as expected. Stock markets rallied on the news right out of the gate.

However, helping to smack down the rally was the September ISM Manufacturing Index which slipped to 54.4 from 56.3 in August, but the consensus of experts had called for a reading of 54.8. Construction spending for August actually increased 0.4%, better than the 0.5% decrease that had been widely anticipated after a downwardly revised 1.4% drop in spending during in the prior month.
The final Consumer Sentiment Survey for September from the University of Michigan came in at 68.2, which is up from the 66.6 that had been reported in the preliminary reading and better than the 67.0 that had been widely expected.
As you can see, traders have a lot to digest on a Friday, and first day of the month. Stock markets shot up right out of the gate, dropped back almost to zero (NASDAQ and S&P dropped below the flat line) and then have since recovered to small gain. Look for things to settle down a bit now as traders want to close up their work and get out of town for the weekend.
Enjoy

Communications from ARA MELKONIANS/ Week of September 27, 2010/ Update #3

Good Morning Everyone and Happy Wednesday! Yesterday was one of those odd days when the stock market closed up, all 3 major indices closed in positive territory, commodities rallied and credit markets improved. It was pretty much green all the way across the board. Markets are flat this morning after equities have recouped early losses, and credit markets are giving back about 1/2 of their gains from yesterday (interest rates worsening).

In fact, Gold finished up $9.70 to $1,308.30 an ounce and hit an intraday high of $1,311.80. Silver reached its highest price since 1980, settling at $21.707 an ounce, up 23.6 cents from Monday. Gold is up 4.6% this month and 19.4% on the year. Silver is up 11.9% on the month and 29% on the year. Some might see this continued buying of commodities as a sign of investors casting their vote for a double dip recession next year. Certainly, sovereign banks are preparing for the worst as they are the major purchasers of gold at this time.

Today's economic calendar is light, but there are several Fed speakers on tap today and markets could jitter in reaction to any comments made that could signal future FOMC policy decisions. The end of the quarter is tomorrow, so don't look for any drastic sell offs. Fund managers will want to keep these gains in place for their quarterly bonuses. What will happen in October? What usually happens in October after a strong September? We'll see if we get any major market corrections this year, but it sure seems likely.

I hope you all have a terrific Humpday and a very profitable and productive rest of the week!

news from ARA MELKONIANS/ Update #4/ Week of August 30, 2010

Good Afternoon Everyone and Happy Thursday! Although equity markets are flat this morning, credit markets continue to give back a little ground as treasuries started the day off on the wrong side of the flat line. Traders are quiet today awaiting the big announcement tomorrow morning on payrolls and unemployment. Yesterday turned out to be quite the winning day for bullish traders on Wall Street with the S&P surging 3% on the first day of September.

Yesterday's rally was a bit of a surprise considering most of the economic news wasn't all that favorable. By the end of the day we learned that auto sales as a whole had their worst August since 1983 -- our country's last double dip recession. This morning's Initial jobless claims for the week ending August 28 totaled 472,000, which is in step with the 475,000 initial claims that had been widely expected. Initial claims for the prior week totaled 478,000. Continuing claims slipped to 4.46 million from 4.48 million. No big news here, and subsequently, little reaction on the trading floors.

Nonfarm productivity in the second quarter fell 1.8%, which is essentially on par with the 1.7% decline that had been broadly anticipated. Unit labor costs increased 1.1%, as expected, during the second quarter. So, with no earth shaking (market moving) news on the wires this morning, everyone seems to be happy to take a breather and wait for tomorrow's announcement from the Labor Dept. The bulls, I'm sure, are just thankful to hold on to the gains from yesterday.

Pricing is yet a little worse than yesterday's pricing, but who's complaining? These rates are incredible! I hope you all have a terrific Thursday!

News from Ara Melkonians/ Week of August 23, 2010/ update #2

Good Morning Everyone and Happy Tuesday! The sour mood prevalent in equity markets today is largely the result of weakness in Asian and European markets over night. Most Asian markets closed down over 1% -- Japan's Nikkei was down 1.3% to its lowest level since May of 2009. European markets followed suit as all bourses closed in the red, most of them down around 1.5%. It's actually interesting to click on world markets and see all the red. Only China's Shanghai Composite closed in positive territory of all the true major indices around the globe.
Here in the States, traders had to overcome fears from comments of a second recession and dwindling optimism that the economic recovery, slow as it may be, is losing steam and we're sinking back into negative growth. Ben Bernanke will address this on Friday. As insurmountable a task as this one might have seemed, Existing Home Sales was released to put further pressure on the market. It was reported by the Nat'l Assoc of Realtors that existing home sales dropped, or should I say plunged, 27% month-over-month. The figure for existing sales came in at 3.8M which is quite a difference from the 4.7M anticipated. We anticipated this might happen when the tax credit expired, and boy did it happen!

The Dow dipped below the 10,000 mark earlier this morning for the first time in a month, and although we've recovered some of those losses, there's not really anything on the horizon that leads us to believe we'll have a sustainable rally for some time. Do I seem a little pessimistic about the economy? Well, I guess I am, but at the same time I'm optimistic about interest rates and what's happening in the bond market today.

The yield on the 10 year note hit 2.46% earlier in the session -- its lowest mark in 17 months. The 2 year note yield dropped to .45% earlier this morning -- a record low. The difference between the 2 yr note yield and the Fed Reserve's target lending rate reached its narrowest point since December of 2008 -- amid the financial collapse many of the country's largest banks. These are truly fearful times for traders and the short term future of our economy. Good news is . . . rates thrive on bad news, and rates are smokin' hot lately. Hope you can take advantage of it!

News From Ara MELKONIANS/ Week of 8/23/2010/ Update #1

Good Morning Everyone and Happy Monday! Last week was almost a wash for traders on Wall Street. The Dow lost a mere 89 points for the week, the NASDAQ gained 7 points and the S&P lost 7. However, credit markets improved and pricing improved . . . and oil prices dropped . . . what's there to complain about? Refinance applications are up and turn times at the wholesale shops are getting longer and longer. I guess that's good news for all of us.
At the combined CAMP and CMBA conference last week there was a presentation by an economist from Stewart Title. He showed a very interesting graph up on the screen about the amount of money that borrowers can finance at these low rates. That same amount of principle drops about 5% for every .50 of a point rise in rate. Thus, if average rates go up 2% points (from 4% to 6%), borrowing power (the amount financed possible) drops by 20%. Hence, this is the time to refinance… Borrowers can keep their payments low and borrow so much more at these rates today!

No major economic news releases are on tap for today, so markets are reacting to some M&A activity taking place this morning in the corporate board rooms of companies like HP, Dell, Campbell's soup and Miller beer (not all bidding for the same acquisitions of course). Look for markets to be adrift all day today as traders basically have rumors on which to gauge their direction. Credit markets are good, but volatility indexes are tough to read.

I hope you have a terrific Monday, and a very profitable and prosperous week!

news from ARA MELKONIANS/ week of August 9, 2010

Good Morning Everyone and Happy Friday! Last week's stock market rally added nearly 200 points to the Dow (see Monday's email blog), that's the good news for bullish traders. Unfortunately, this week has been quite a disappointment for those hoping to add to the 3 week long weekly rally which saw the Dow gain over 500 points. This week, if we were to close at this level at which we presently sit, we will have lost a little over 350 points for the week.
Stock markets around the globe seem to have settled down early this morning and the same calm (or maybe exhaustion) is present in our equity markets. I say this because Hong Kong's GDP came in lower than expected and Germany announced stronger than expected GDP . . . yet most markets around the globe closed with less than .5% reaction one way or the other. Traders in the US equity markets are receiving a mixed bag of economic data giving no real direction for which markets to move.

Advance retail sales showed a 0.4% increase, but that was slightly less than the 0.5% increase that had been widely expected. Prior month sales were revised upward to reflect a 0.3% decline. Excluding autos, retail sales were up just 0.2%, which is in line with expectations. July's Consumer Price Index made a 0.3% monthly increase, which is slightly sharper than the 0.2% increase that had been widely expected after a 0.1% decline in the prior month. Excluding food and energy, consumer prices were up only 0.1% month-over-month, as anticipated.

This CPI report counter's last month's deflationary numbers and sparks the debate on whether the Fed should be more concerned about inflation or deflation, and what tools the Fed has left to do anything about it anyway? The debate rose to a shouting match this morning on CNBC -- did you see it? If not, go to CNBC.com and see the recap. I thought Chicagoan Rick Santelli was going to have have a conniption fit. I love that guy's passion for his job.

The preliminary August Consumer Confidence Survey from the University of Michigan came in at 69.6, in line with the reading of 70.0 that had been widely expected, and represents an improvement from the 67.8 that had been recorded in July. The dollar is strong, oil prices keep falling and credit markets have recouped the small losses from the last couple of days. All this should mean very good rates today once again.

Look for the markets to be quiet throughout the day as traders hit the road for the weekend. I hope you have a terrific Friday and a very restful and relaxing weekend!

Update #1/ ARA MELKONIANS/ week of August 2, 2010

Good Morning Everyone and Happy Monday! Today starts a new week and a new month . . . and stock markets are off to the races to get August off to a great start. July ended up being quite a good month for the Dow and the S&P. The Dow's rally of 7.1% last month was the best month it has had since last July. The S&P jumped 6.9% last month to post its best month in a year also. Much of the gains were due to global stabilization of credit markets as Europe conducted its stress test on banks and many passed with flying colors.
On that same subject, HSBC, Europe's biggest bank, reported this morning that their first half of the year's before-tax profit topped $11 Billion, much better than the $8.8B anticipated by the analysts. Much of this profit is due to the North American unit posting a profit for the first time in 3 years. Hence, with the Euro rising, our US dollar is weak today which usually helps the stock markets rally.

The biggest story that affects us in the mortgage industry today is the comments from Bill Gross on deflation. Bill Gross, of PIMCO -- the world's largest manager of bond funds, is probably the most respected fund manager in the country. His fear of deflation going forward is based on falling home prices, flattening labor income and the possibility of a slowing economy going forward. This will keep investors focused on the long bond (which he manages) and will keep mortgage interest rates low for the foreseeable future.
Ben Bernanke, speaking this morning in South Carolina, continued his mantra that the economy is in a slow recovery. This campaign comes on the back of the GDP results last week showing a 2.4% growth for Q2. Although, he went on to say, the growth is not enough to address the continuing unemployment problem that plagues our country.

The Institute for Supply Management's manufacturing gauge fell to 55.5 in July from 56.2 the month previous, but any reading over 50 points represents expansion. July's number topped expectations of 54.5 from the experts. Construction spending surprisingly grew 0.1% in June according to the Commerce Dept. Experts were looking for a drop of .5% -- so as you can imagine, these two reports have helped fuel the big rally on Wall Street this morning.

Fortunately, credit markets aren't getting hammered too badly, possibly buffered by the outlook from Bill Gross. August is starting off with a big rally, we'll see if the bulls can hold their gains. I hope you all have a terrific Monday and a very prosperous and productive week!

News from ARA MELKONIANS, week of July 19, 2009, #1

Good Morning Everyone and Happy Monday! Stock markets are flailing today trying to find some direction after a less than stellar showing last week. The Dow lost about 100 points last week, ending its streak of consecutive weekly gains. It doesn't appear positive corporate earnings are going to create the rally for which bullish traders are looking this time around. Earnings season kicks into high gear this week, so put your seatbelts on, it proves to be a wild ride for the next couple weeks.

The Wall Street Journal has an interesting article in Section C, page 2 about the future of mortgage rates and in particular Treasury yields. The article quotes several economists who suggest that the economy is going to suffer for a couple more years yet… Very interesting read.
The economic news that knocked the stock markets off their early morning rally comes from the National Homebuilders Association Index which came in at a weaker-than-expected 14, as analysts were looking for a reading of 16. This news comes on top of the disappointing Michigan Consumer Sentiment from last week. Apparently, we as a nation of optimists are getting less so as this recession wears on.

For now . . . have a terrific Monday and a very productive and prosperous week! As always, I welcome your insight and your feedback.

News from Ara Melkonians/ Thursday/ Week of July 5, 2010

Good Afternoon Everyone and Happy Thursday! Bullish equity traders finally got their wish yesterday with a solid triple-digit rally for the Dow. Yesterday's strong run was led by financial stocks, especially big banks, as the Dow finished the day up 174 points! This encouraging close for the US stock markets helped the Asian markets post healthy gains overnight, too. Hence, the rally continues today, not nearly the scope of yesterday's gains, but those sizeable gains from yesterday seem to have been pocketed for now.
The big question of the day today is . . . Where will LeBron go? My personal feeling is that he will end up with the Chicago Bulls. What greater stage can he play on than Chicago? Seriously . . . I know you Clippers fans are hopeful, too, but the former playhouse for MJ could only suit the talent of the present King of basketball.

Anyway, moving on . . . the stock market rally this morning is spurred along by the release of the Initial Jobless Claims for the week ending July 3rd. This report showed a significant drop from the previous week. This week's total claims came in at 454,000 --very close, but better than analyst’s expectations of 460K. This number is down 21K from the previous week and represents the lowest reading since the beginning of May. Even better, Continuing Claims dropped a whopping 224K w-o-w to 4.41M -- the lowest reading in 8 months! No news moves the markets like job news and housing news, and this report is finally a positive one.

Hence, with a positive stock market, we typically see a sympathetic credit market, and such is the case today. Rates are up just a bit from yesterday as credit managers wait and watch what happens on Wall Street. The trading is pretty choppy at the NYSE, so don't look for a substantial run up again today. I think bullish traders will be happy to hold onto yesterday's gains if they can.

Have a terrific Thursday!

Update #3/ Week of June 28, 2010

Good Afternoon Everyone and Happy Wednesday! The markets are still reeling from yesterday’s huge sell off, and right before the end of the month, too. Wow, what a bummer for Bullish traders and those poor fund managers who won’t get their million dollar bonuses this quarter. We all feel very badly for them!

Equity markets shot up right out of the gate in an attempt to recoup some of the losses from yesterday, and hence, credit markets ran for cover. However, when the ADP Employment Change Report was released about 8:30 a.m. our time, the news smacked the markets back down to the flat line. The report states that private payrolls for June increased by only 13,000 jobs . . . quite a bit lower than the 61K for which analysts were looking. This also puts the fear of God into the traders about what Friday’s Gov’t official unemployment numbers will look like.
Hence . . . credit markets have settled back down, but we are looking for a volatile day with traders settling quarter-end positions throughout the afternoon.

Ara Melkonians

Update #2/ Week of June 21, 2010 (Ara Melkonians)

Good Afternoon Everyone and Happy Tuesday! Yesterday we extended our streak of 100+ point moves on the Dow when the Index went from plus nearly 150 points at it’s high early in the session, to close with a loss of 8 points. The NASDAQ ended with a surprising loss of 21 points or nearly 1%. Stock traders must be frustrated as the first ½ of the year comes to a close in just 7 trading sessions and they don’t have much to show for 6 months of work thus far. In fact, the S&P is 1 point below where it started 2010 back on Jan 1. The Dow has gained a whopping 27 points in that same period of time. Not very impressive.

Today’s housing report from the Nat’l Association of Realtors isn’t doing much to help rally stocks, either. We learned this morning that existing home sales actually dropped 2.2% in May surprising economists who were expecting a 6% rise! Now that was quite a miss! On an annualized basis, analysts were expecting a rate of 6.1M and reality came in at 5.66M last month. We were supposed to have some follow thru from the tax incentive that expired at the end of April, but apparently that was not the case. This does not bode well for June’s numbers and the subsequent months ahead.

The silver lining in this story is that inventories of unsold homes dropped 3.4% to 3.89M – this represents an 8.3 month supply at May’s sales pace. However, we know that banks are holding on to thousands (and literally upon thousands) of homes yet to be released into the market place. Another happy part of the story is the median sales price for May was 179K . . . up 2.7% from May of 2009. Also, in a different report, the House Price Index for April showed an increase of .8% from the previous month, when the experts were looking for a rise of .3%.

Discussions this morning on CNBC and around the offices of mortgage and real estate firms ought to be concerning home prices for the remainder of 2010. With 450K consumers bailing on their loan modification, a new wave of adjustable mortgages maturing this year and no tax incentive . . . what will happen with foreclosures the 2nd half of this year. And . . . how will that impact home prices? Are we in for a double dip? The magic 8 ball says, “maybe so.” MI companies seem to be betting that prices will not drop significantly, but the guy on CNBC this morning said maybe 10%, maybe 25% further drop. That would be bad.

I am in the office all day today and available for your pricing or loan scenario questions. The results of a 2 year Treasury auction will be released today. We’ll see if this has any impact on pricing. We are about where we were on Friday with our rates today. Rates are holding steady. J Have a terrific Tuesday!

Update #1/ Week of June 21, 2010 (Ara Melkonians)

Good Morning Everyone and Happy Monday! Today’s market looks almost identical to last Monday’s start to the week. Equities markets last Monday saw the Dow shoot up over 100 points, only to end the day in the basement. However, Tuesday’s rally of over 200 points was pretty much the gain for the week for the Dow by the close on Friday. This morning saw the Dow jump up almost 150 points, however, the rally is dissipating and at this moment, with the Dow is only up less than 60.

With a lack of economic reports and corporate news from the US today, the big news comes from Asia where the Peoples Bank of China has decided to let its currency rate move along with the markets and “float” instead of being fixed by the Gov’t-run bank. The Communist run country has long been accused of deliberately undervaluing its currency in an effort to boost exports. This decision now allows the currency (the Yuan) to float along with markets and this move is seen as a necessary policy to help curb inflation which is climbing wildly over there.

The Asian markets obviously liked the announcement as the Hang Seng rallied over 600 points early this morning! Tim Geithner, US Treasury Sec, said, “We welcome China’s decision to increase the flexibility of its exchange rate. Vigorous implementation would make a positive contribution to strong and balanced global growth.” US corporations that export to China are expected to benefit from this decision, especially those that provide natural resources such as energy and metals. Thus, we saw the stock market shoot up right out of the gate this morning, and gold hit a new high in over night trading.

Oil prices are up, which always aids the Dow. Treasuries ran for cover early this morning, but have since come back into the game. Hence, our pricing is about .250 to .375 worse in fee then we were on Friday. However, if the trend of the last couple hours continues, we should see some improved pricing and get back closer to where we were when we finished the week last week. I’m in the office all day today, to help you in any way I can. Please call me here or email me if I can be of assistance to you with a loan scenario or pricing question. Have a terrific Monday and a very profitable week!

Update #3/ week of June 14, 2010

Good Morning Everyone and Happy Wednesday! Equity markets rallied yesterday like there was no tomorrow. We discussed yesterday morning at this time, that absent a derailment like some big announcement from Greece or something, this rally seemed to have some steam and could finish the day in positive territory. Boy did it! The Dow finished the day up over 200 points, and the good news is, credit markets didn’t over react on the news. In fact, the 10 year note this morning is right where it was on Monday morning and pricing, although worse than yesterday, is pretty much right back where were at the beginning of the week.

Today, the markets seem to be taking a bit of a breather, although early morning losses have been wiped away and we are pretty much right at the flat line for the day. So, we have to cheer the equities that they put on quite a show yesterday, powering through their 200 day moving averages, and are able to hold on to those gains today.

This morning’s economic news presents a mixed bag for the economy. First of all, the PPI fell a seasonally adjusted .3% in May according to the Labor Dept. This should be good news, in that when producers show a drop in prices it usually carries through to lower prices for the consumer 4 to 6 months down the road. Analysts, however, were looking for a drop of .6%, so it comes as a bit of a disappointment. Also, the Core PPI came in with an increase of .2% when the experts were looking for a rise of .1% -- shows how much influence gas and energy prices stabilizing in May held inflation in check. Producer’s Prices, however, are up 5.3% from last May – the biggest jump since Sept of 2009.

With inflation seemingly under control, we turn our attention to the more headline news of the housing industry. Traders were disappointed to hear this morning that housing starts fell 10% to a seasonally adjusted annual rate of 593K homes in May. This represents the lowest level, according to the Commerce Dept, since December. Some would have thought that warmer weather and Summer Sun would have helped housing starts, but apparently this is not the case. Building permits fell last month, too, for a second month in a row. Starts of SFR’s dropped 17%, the lowest in a year. Nobody wants to hear bad news in the housing sector, but there just aren’t enough buyers available out there for which these builders to want to build homes.

This not so happy housing news is helping to keep credit markets in positive territory today after not losing much ground yesterday. Pricing is good today considering everything going on. We’ve had 100 point swings on the Dow the first 2 days of the week, we’ll see how today finishes up. Speaking of today, I will be here in the office all day today. Call me here or email me with any loan scenario or pricing questions . . . and have a terrific Humpday!

Update #3, week of June 7 2010

Good Morning Everyone and Happy Wednesday! Make that 3 days in a row – triple digit moves for the Dow. Yesterday’s close up 123 points put credit markets on their heels going into today’s trading session. Uncle Ben’s testimony this morning before the House Budget Committee has given impetus to the rally in equities this morning and we are up over 100 points on the Dow at this moment.

Credit markets are taking it a bit on the chin as the 10 year note yield moves back over the 3.20 mark. Fortunately, our pricing hasn’t retreated much, we’re about .125 and ½ of an .125 (18 bps) worse than we were yesterday at this time on our conforming 30 year fixed rebate offerings. The higher note rates of 4.875 to 5.25 are affected very slightly.

The prepared speech by Ben Bernanke, Fed Chairman, included remarks about how the economy is gradually, yet slowly improving. No sign of a double dip in his models, but anything’s possible as we all know. He commented on Europe’s financial woes, but was encouraged that they are doing the things necessary to keep stabilization in the region. Of course, they lack a central bank as we are privileged to here in the States, to make sweeping monetary reforms for the EU.

Wholesale inventory data for April show that inventories increased .4% during the month, slightly less than the .5% for which analysts were looking. Inventory data for Crude Oil released this morning showed a draw of 1.8M barrels, this after several weeks of ample inventory reports. This is causing oil prices (July Crude) to rise to almost $75 a barrel and is helping oil stocks/companies add to the Dow rally this morning.

I will be in the office all day today, but I will be out in the field all day tomorrow. Please call me here or email me with any loan scenario or pricing questions. Have a terrific Humpday!

Warmly,
The Ara Melkonians TEAM,
Chief Mortgage Banker/ Operations Manager
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Final Update/ Week of May 31, 2010

Good Morning Everyone and Happy Friday! Well, it’s not a happy Friday if you are heavily invested in the stock market and were hoping for a big rally today. We got a little sniff of this on Wednesday when the ADP Payroll report only posted 55K new jobs for the private sector. The Labor Dept came out with their official nonfarm payroll report for May which showed an increase of 431,000 jobs – one would think that would be enough to create a rally, but analysts were looking for 500K. The unemployment rate did drop to 9.7% from 9.9% the previous month and came in below the 9.8% anticipated.

Concerns in the EU have spooked the markets once again with word of Hungary being in financial trouble now. The Dow is down 225 points at this moment, off its lows of the morning. Just a few minutes ago we were down 250 and below the psychological 10K mark. Apparently that’s when things bounced back. If we stay near these levels for the day, this will be the 5th out of the last 6 weeks of negative closings on the Dow. Credit markets are improving big time this morning and pricing should be good.

I’m out of the office today out making calls. Reach out and touch me on my cell phone today if you need me. Have a terrific Friday and a very restful and relaxing weekend!

Update #4/ Week of May 31, 2010

Good Morning Everyone and Happy Thursday! The stock markets enjoyed quite a rally yesterday especially in the latter half of the day. News of positive retail sales from the three big auto makers helped to keep the rally going all through the afternoon. The Dow closed up 226 points by the end of the day. This rally helped to fuel rallies over seas as the Nikkei and the Hang Seng both closed up over 3% early this morning. Today we take a little breather as traders attempt to digest the veritable buffet of economic news on the wire this morning.

The first report released this morning in regards to the US economy was the latest ADP Employment Change report which told us that payrolls from private corporations increased by 55K in May. This number was a bit of a disappointment as analysts were looking for 70K. This off 10K from the upwardly revised number of 65K in April. Tomorrow the Labor Dept reports its Unemployment figures and will tell us how many jobs were created from their analysis. Initial Jobless Claims for the week ending May 29 came in at 453,000 – down 10K from the week previous, but not much of an improvement. Continuing jobless claims actually increased 31K from last week . . . the wrong direction for those claiming the employment situation in our country is getting better.

First Quarter nonfarm productivity’s final reading showed an increase of 2.8%, down from the 3.6% in the last revision. Unit labor costs for Q1 fell 1.3%, which is good, but not as good as the 1.6% anticipated. Factory orders for April increased 1.2%, but not as good as the 1.7% expected. We have a pattern here, can you see it? The ISM Services Index for May did come in at 55.4, almost at analysts expectations of a 55.6 reading. Most of the reports this morning were disappointing, and missed expectations. Thus the weakness in equity markets today, and the subsequent quieting in credit markets. (thank you!)

We did get a price worsening yesterday in mortgage rates when the stock market shot up like it did, and those rates are holding this morning. We’re about .375 in rebate off where we started yesterday morning on our fixed conforming product. Not too bad. Tomorrow will be an exciting day to be sure. I’m out in the field today and tomorrow. Call me if you have any loan scenario or pricing questions. Have a terrific Thursday!

Update #1/ Week of May 24, 2010/ Ara Melkonians-Chief Mortgage Banker

Good Morning Everyone and Happy Monday! When I said last week that you should lock in this 4.375% rate as quick as you can since big banks really don’t want to offer this rate . . . I didn’t think it would only be available for a couple hours. Seriously. The 4.5% note rate on our 30 year conforming product this morning does have a slight cost (nearly 3 bps) so it is definitely still available. However, Friday morning’s pricing had a (.529) rebate on the 4.5%, par on the 4.375%, and credit markets are basically the same level this morning as they were at that time. You need to have your finger on the trigger in case we see it again, ‘cause rates won’t be at these levels for long.

The only economic news on the calendar this morning is the Existing Home Sales report for April which showed a surprise jump upward of 7.6% m-o-m to an annualized rate of 5.77M units . . . just higher than the 5.62M anticipated. Not sure why this is supposed to be a big news story, since we all know the news story is clouded by the fact that April was the last month for the tax incentive. It will sure be interesting to see how May looks. Hopefully realtors can catch some wind going into Summer and keep these numbers from falling too far.

News out of Spain that their Central Bank took over a regional bank named CajaSur has spooked markets once again. The Euro is down 1.5% compared to the US dollar which is strong today not only vs. the Euro but also compared to a basket of foreign currencies. This is weighing on our stock markets here, too. However, weakness in equities has meant strength in credit markets (and commodities, today) and better pricing for us. So let’s enjoy these low rates and get some loans locked!

Update #3/ Week of May 17, 2010- ARA MELKONIANS

Good Afternoon and Happy Wednesday! Again, it all started last night in the Asian markets where the Hang Seng closed down 366 points. It continued in Europe in reaction to the news that Germany had put a stop to naked short selling (I’ve mentioned this before, if the traders want to sell their shorts that’s their business . . . but put some clothes on and quit running around naked!) without the consent of the rest of the EU. France and Germany both have showed signs recently of snubbing the EU system, and this is of grave concern to those who feel the whole union over there could fall apart.

Thus, European individual stock markets closed down anywhere from 2.5 to 3.0% almost straight across the board. US equity markets fell right out of the gate, with the Dow dropping almost 200 points in the first couple hours of trading today. We’ve since made up a portion of those losses, but still find ourselves in negative territory by double digits. The CPI for April was released this morning showing a decline of .1% -- similar to the PPI earlier this week. Again, deflation isn’t necessarily a good thing either, and there have been few times in our economy that we have even seen deflation – never in good times, of course. Core CPI was flat and probably didn’t provide much incentive to move the markets one way or the other, but seemed to have stopped the selling for the time being.

We learned this morning that mortgage delinquencies are on the rise once again. The first quarter of this year saw a rise to 10.1% from 9.5% the previous quarter. This economy continues to starve people out and apparently, more people are falling behind on their mortgages than ever before -- this is the highest reading in 30 years. As you can imagine, this report did nothing to help the equity markets and the sinking continued once again as soon as it was released.

Credit markets are rallying once again. Mortgage rates are improving steadily…this is the time to LOCK IT UP! Call me here or better yet email me if you need me. Have a terrific Humpday!

Update #2/ Week of May 17, 2010

Good Morning Everyone and Happy Tuesday! Equity markets are struggling this morning in the face of some disappointing economic news releases. The first release was April’s Producer Price Index (inflation barometer for producers, and a sign on prices for the consumer 4-6 months out). April showed a .1% decrease, which was in line with expectations, but economists don’t want deflation. That’s not a good thing either. Prices should rise (as this will affect earnings, too), but only in the 1 to 3 percent range. The month previous the PPI had shot up .7%, so this reaction in April is a little disconcerting. The core PPI did rise .2%, slightly higher than the .1% anticipated.

Housing starts for April did rise 5.8% to an annualized rate of 672K, stronger than the 650K expected. However, building permits dropped 11.5% in April to an annualized rate of 605K . . . far worse than the 680K for which analysts were looking. Equity markets have pulled back and slipped into negative territory, but for those most part are hovering around the unchanged mark. Credit markets are improving and thus rates are still improving. That’s always the good news.
I’m out in the field today. Call me on my cell if I can help you in any way. Have a terrific Tuesday

Update #1 / Week of May 17, 2010

Good Morning Everyone and Happy Monday! It all started last night with Asian markets selling off through the night. China’s Hang Seng closed down 420 points! The only economic news release for the US is the Empire State Manufacturing Survey which fell sharply in May to 19.1 from the 31.9 posted in April. The report did nothing to help equity markets today. Although the indices floated around the flat line for a while this morning, they have now dropped sharply and the Dow is off over 125 points as I send this article to you.

The dollar is strong today compared to a basket of foreign currencies. Troubles in the Mediterranean countries continue to haunt markets around the globe. Good news is, oil is down (prices are improving at the pump too) and mortgage rates are improving. We should see this trend continue this week as secondary marketing guys continue to offer better pricing each day. It’s taking a while for rates to float down, but at least they finally are!

I’m going to be tied up for about an hour, and then will be available to you for the rest of the day in the office.

Have a terrific Monday and here’s to a very productive and profitable week!

Final Update-Week of May 3, 2010

What a record day yesterday! Made stranger by a technical glitch in the trading system which caused the Dow Jones to sink as much as 1000 points at one point. It was the largest intraday drop in the history of the Stock Market. Yet, even when the technical glitch was realized and fixed (within minutes) the Dow still lost 350 points for the day. Credit markets rallied all day and have pretty much held to their gains this morning.

We were just hoping for a flat market today so we could keep those gains in the credit market, and instead we saw further selling in equities at the opening bell. Equity markets have pretty much made up their losses for the morning and are presently right at the flat line. What will happen the rest of today? Probably not much as traders try to get out of town for the weekend. Next week will probably see some recouping of the losses from the last 2 weeks I would suppose. There is still plenty of cash on the table and investors will want to buy in at these bargain prices.

The President actually took the podium this morning to announce the stellar numbers for job creation for the month of April. Our economy added 292,000 jobs in April . . . 66K were census workers, 59K were gov’t workers, 12K were in retail. Even still the unemployment rate rose to 9.9% -- as the President pointed out, this represents more people entering the “work force.” What that means is, the unemployment numbers are derived from hundreds of workers at the Labor Dept that call people and ask them if they are employed, if they are looking for a job . . . those “unemployed” people must not be employed and must be looking for a job (not have quit looking). This is the “work force” (a combination of those looking and those working) and 9.9% of them are looking for a job.

What the President said that really surprised me was, “the government is limited in what it can do.” I kind of had the impression that he thought the government could do everything for us. BUT . . . I digress, this isn’t a political op piece. I will be gone for an extended luncheon this morning, but here all morning and all afternoon for your questions. Get your locks in, as Secondary Marketing traders are always very slow to chase a falling market. Have a terrific Friday and a very restful and relaxing weekend!

Upadate #1/ Week of April 26, 2010

Good Morning Everyone and Happy Monday! It is a Monday, so we almost have to have a positive day in equity markets. The Dow is struggling to hold on to this morning’s gains, but the NASDAQ and S & P have already fallen below the flat line. Last week equities were positive for the 8th straight week. This rally is truly amazing. The Dow the week previous (ending April 16th) had only eked out an 21 point gain to keep the streak alive. Last week (the week ending April 23rd) the Dow gained an impressive 186 points, or just shy of 1.7% -- a good week for equities to say the least.

Even better news than that, credit markets have remained in a trough this whole time, not losing any ground for the last several weeks. Although, we are at a new plateau in pricing and it would sure be nice to see this rally in equities break and credit markets improve. It’s bound to happen eventually. Last week’s positive rally in US equity markets got the Asian markets off to a good start early this morning – Japan’s Nikkei closed with a rise of over 250 points and China’s Hang Seng gained almost 350 points! However, US markets don’t seem to be able to capitalize on the momentum thus far.

Earnings season continues this week as we heard from Whirlpool, Caterpillar and Humana which all, of course, beat the street. Citigroup announced that the Treasury Dept will be selling off 7 billion shares of the company – probably at a discount. There are no major economic news releases of note today. However, we will have another round of Treasury auctions this week, starting with an auction of 5-year TIPS today. This will continue all week, and may have some impact on credit markets.

I will be in the office all day today… Have a terrific Monday and a very prosperous and productive week!

Final Update/ Week of April12, 2010/ Rate Improvement

Good Morning Everyone and Happy Friday! And boy, is this a happy Friday for those of you that have been waiting for stocks to break and mortgage pricing to improve! Equity markets were ticking along just fine this morning hovering around the unchanged mark early on. It looked like this was just going to be a lack luster day on Wall Street . . . and then the bottom fell out. Around 7:30 a.m. our time, the SEC announced that they would be filing charges against Goldman Sachs for fraud. The SEC is accusing Goldman Sachs and one of it’s VP’s of fraud “by misstating and omitting key facts about financial instruments related to subprime mortgages.” Shares of Goldman have dropped over $23 a share now and financials are falling like a rock.

The impact to the rest of the markets is truly something to behold. Many of us have been looking for a correction for some time now as the stock markets have just climbed non stop for 2 months. Maybe traders are using this event to sell out of positions they felt were over bought in the first place. Anyway, the Dow is down about 150 points now, commodities are down straight across the board, and credit markets are improving. The Volatility Index is up 18.3%!

Too bad for bullish traders, because the market received some good news this morning in the housing industry. New construction of US houses rose for the 3rd straight month in March, per the Commerce Dept. Housing starts rose 1.6% in March, stronger than expected. Building permits rose 7.5%, the highest level since Oct. of 2008. However, the Reuters/Univ of Michigan Consumer Sentiment Index dropped to 69.5 in April from the 73.6 posted last month. Analysts were looking for a reading of 75. This mixed picture had the market at the flat line until the big announcement was released by the SEC.

The rate sheet attached reflects the pricing as of that moment in time, but we are bound to get pricing improvements from investors through out the morning. I will be getting to you a revised rate sheet as soon as that happens. This looks like it’s a good day to lock if we start getting improvements. Monday will likely see some kind of bounce after traders get the weekend to let their heart rates slow down.
I’m here in the office all day today. Call me here or email me if I can help you with a loan scenario or a lock. Have a terrific Friday and a very restful and relaxing weekend

Update #2/ Week of April 12, 2010

Good Morning Everyone and Happy Tuesday! Well, as promised, we are on a wild ride this morning on Wall Street. Alcoa reported earnings after the bell last night and even though they hit the 10 cents a share figure expected, their revenues were off quite a bit. Immediately after the earnings were released, a UBS analysts downgraded the stock. This news flowed into this morning’s opening bell as the Dow dropped almost 60 points right out of the gate. Credit markets responded favorably to the drop in equities and it appeared we were going to have another good day in bond land. However, equity markets have rebounded, and credit markets are holding their own.

Also, not helping the stock market this morning was the release of the February trade deficit which came in a $39.7 Billion . . . quite a bit worse than the $37.0B from last month. Analysts were looking for a number like $38.5B, so this didn’t help the mood on Wall Street. Attention turns now to earning report to be released by Intel after the bell today. There’s a busy day of economic reports tomorrow with Retail Sales being released, CPI and earnings report from JPMorgan Chase. The Volatility Index has spiked today – up 6.9% this session alone. More than a billion shares have already been traded on the NASDAQ . . . this is going to be a fun week!

Several of our investors re priced for the better yesterday afternoon, and that trend continues into this morning’s pricing. Take a look at the 30 year fixed product for conforming . . . we have (.501) rebate at 4.875% . . . nearly a 3.00 rebate at 5.375 (for N/O/O)! Nice! The Confumbo 30 year fixed product is sporting a rebate at 5% . . . question is, will this continue to be a trend? More than likely, but still, seems like a good day to lock to me. If you’d like to, please email me and let me know your lock is coming over.

I will be in the office all day as long as there are locks to be completed. I may be heading out this afternoon to go visit accounts. Call me on my cell if I can help you out in any way. Have a terrific Tuesday!

Update #1, Week of March 22, 2010

Good Morning Everyone and Happy Monday! We ended last week on a down note for equity markets after 8 straight days of positive closes. The Dow closed Friday down 37 points . . . and what do you know . . . we’re up 38 points right at this very minute. A negative tone seemed to be prevalent before the opening bell maybe from steep losses in Asian stock markets overnight. However, the markets have stayed steadily positive, and as I mentioned before, we are exactly where we started on Friday morning.

Health Care reform obviously dominates the economic news page this morning. Last night’s passage of the Health Care Reform bill has traders scrambling to try to assess the impact on the economy and health care related stocks. There are no economic news reports of note today, so the markets will likely revolve around this big health care issue throughout the day.

Gold prices have dropped below $1100 an ounce for the first time in several weeks, as a strong dollar puts pressure on stocks and commodities. Oil prices were about $1 below the $80 benchmark early this morning that has been it’s roost for most of the year, but has since made up those losses and trades only modestly negative. Credit markets are improving today and thus, our pricing is about (.125) better than Friday’s rate sheet -- still in this very tight trough.

I will be in the office all day today, however, I will be out and about tomorrow visiting broker shops. Call me here or email me if I can help you with a loan scenario or pricing question. Have a terrific Monday and a very profitable week!

Update #4/ Week of March 15, 2010

Good Morning Everyone and Happy Thursday! I’m just not going to make the comment today about a flat market, but truly today . . . we are right at the unchanged mark on all 3 stock indices. Equities have quietly marched steadily higher for pretty much the entire month of March so far. Credit markets during this time have remained steady, and pricing even today is slightly better than yesterday’s pricing. Again, we’ll take it.

The stock market is taking fuel from good earnings reports this morning from retailers like Nike and Guess, and from FedEx – which in particular many analysts feel is a good indicator of future consumer growth. However, the US dollar is showing some considerable strength – up a full 1.0% over its competing currencies, and putting pressure on the stock markets. In Economic news this morning, inflation continues to prove itself a non factor at this point in the economic recovery. CPI for February was flat, a .1% increase was expected, but it came in right at zero. Core CPI did increase .1% m-o-m in line with expectations, so no market moving news there.

Jobless claims for the week ending Mar 13 totaled 457K – in line with the 455K figure for which the experts were anticipating. Continuing claims however, continue to rise as this week’s number came in at 4.58M, just higher than the 4.52M anticipated. Last week’s number was revised upwardly to 4.57M . . . no relief seems to be in sight on this front. The Philly Fed Index for March came in slightly better than expected. March’s number is 18.9, which tops expectations of 18.0. Leading Economic Indicators rose .1% as expected, maybe someday we’ll see the results of these positive leading indicators.

I will be in the office all day today! Please call me here or email me for a faster response. Have a terrific Thursday!

Update #3/ Week of March 15, 2010

Good Morning Everyone and Happy St. Patty’s Day! Stock indices tack on another gain so far in an attempt to close out it’s 7th straight day of positive closes.

The Dow, at this moment, sits at 10,728 – finally cresting its high for 2010 and hitting levels not seen since Sept of 2008. It’s been a while since we’ve been here on equity indices, but we are notching these small daily gains pretty consistently, so the likelihood of a continued rise is good. Many analysts were looking for a correction right after the 1st of the year, and we did get one, it just wasn’t as big as many predicted. However, the stock markets have been pretty much flat for about 2 months, up until a couple weeks ago when we started posting these daily gains. Thus, a correction at this point does not seem likely -- look for equities to keep rising.

What does this do to credit markets and rates? Well, we were pleasantly surprised to see rates improve yesterday. Credit markets have pocketed their gains from yesterday afternoon and this morning our rate sheet reflects any where from an (.125) to (.250) improvement from yesterday’s rebates. We’ll take it.

Traders got some momentum this morning from Asian markets who closed very strong early this morning. Maybe our Fed decision helped in some way spark this rally. PPI (Wholesale inflation) for February dropped .6% m-o-m, far deeper than analysts’ .2% expectation. This is good news after January’s pop of a 1.4% increase (month over month) that put a scare into economists looking for continued low inflation. Corporate news is light today as is trading volume once again. Trading volume has been very low for the past several trading sessions, and the volatility index has dropped another 5.3% -- it’s lowest mark since May of 2008. Calm seems to be ruling the markets lately. I guess that’s good, but it’s no fun.

I will be in the office all day today, however, I do have an appointment mid afternoon and will be unavailable for a couple hours. Otherwise, if I can help you with a lock, a pricing scenario or a program question, please call me here or better yet email me if I can help you. Have a terrific Humpday!

Update #3/ Week of March 15, 2010

Good Morning Everyone and Happy St. Patty’s Day! Stock indices tack on another gain so far in an attempt to close out it’s 7th straight day of positive closes.

The Dow, at this moment, sits at 10,728 – finally cresting its high for 2010 and hitting levels not seen since Sept of 2008. It’s been a while since we’ve been here on equity indices, but we are notching these small daily gains pretty consistently, so the likelihood of a continued rise is good. Many analysts were looking for a correction right after the 1st of the year, and we did get one, it just wasn’t as big as many predicted. However, the stock markets have been pretty much flat for about 2 months, up until a couple weeks ago when we started posting these daily gains. Thus, a correction at this point does not seem likely -- look for equities to keep rising.

What does this do to credit markets and rates? Well, we were pleasantly surprised to see rates improve yesterday. Credit markets have pocketed their gains from yesterday afternoon and this morning our rate sheet reflects any where from an (.125) to (.250) improvement from yesterday’s rebates. We’ll take it.

Traders got some momentum this morning from Asian markets who closed very strong early this morning. Maybe our Fed decision helped in some way spark this rally. PPI (Wholesale inflation) for February dropped .6% m-o-m, far deeper than analysts’ .2% expectation. This is good news after January’s pop of a 1.4% increase (month over month) that put a scare into economists looking for continued low inflation. Corporate news is light today as is trading volume once again. Trading volume has been very low for the past several trading sessions, and the volatility index has dropped another 5.3% -- it’s lowest mark since May of 2008. Calm seems to be ruling the markets lately. I guess that’s good, but it’s no fun.

I will be in the office all day today, however, I do have an appointment mid afternoon and will be unavailable for a couple hours. Otherwise, if I can help you with a lock, a pricing scenario or a program question, please call me here or better yet email me if I can help you. Have a terrific Humpday!

Update #2/ Week of March 15, 2010

Good Morning Everyone and Happy Tuesday! Would it be redundant to say that markets are flat again this morning? Actually, equity markets made up their losses after our rate sheets went out yesterday and were able to close in positive territory for the 5th straight session. Today, although the gains are hardly impressive, all equity indices are in positive territory. Fortunately for us, credit markets are improved from yesterday and our pricing is slightly better than yesterday’s (by anywhere from .02 bps to .08 bps), but an improvement none the less.

Markets are patiently awaiting the decision by the Feds which is due at 11:15 this morning. No surprises are expected, although investors and analysts will be dissecting the accompanying remarks to see if there are any clues for future moves. It can only move in one direction, since the current Fed funds target rate is 0.0 to .25% -- pretty low. Commentators are also looking for any dissenting governors like Kansas City’s Fed Governor who is pushing already for the Feds to raise their target rate.

In Economic News this morning, Import Prices fell in February at a rate of .3% m-o-m, a little more than the .2% drop anticipated. This follows an impressive jump in January (revised today) of 1.3% increase over the previous month. Housing Starts drop again . . . February’s number came in 5.9% lower compared to January representing an annualized rate of 575K units. Analysts were looking for a drop, and the number actually came in a bit higher than the 570K units for which they were looking. However, January’s numbers were revised upwards to 611K units (annualized), so the decline of 5.9% was worse than the anticipated 3.6% -- did that make sense? Building permits fell again in February by 1.6% m-o-m . . . slightly better than the 3.4% drop experts were predicting.

We were told this morning on CNBC’s Morning Call that 3 out of 4 homes on the real estate market are foreclosures. Interesting. Makes it hard for sellers to establish a market price. We don’t really have a traditional buyer/seller interaction taking place. And we all know there are thousands upon thousands of properties still owned by the banks that need to come to market. Thus, a true equilibrium price that economists like to see, is still a moving target.

Gold prices are up about $20 today, silver is up, oil is up, the dollar is weak . . . this typically points to a strong equity rally, but such is not really the case. Traders seem to be satisfied with finishing out the quarter nice and steady. The Dow is up about 230 points for the year, however, it still has about 67 points to go to match the high for 2010 set on Jan 19.

I will be in the office all day today. Call me here or better yet email me if I can help you . Have a terrific Tuesday and a very prosperous rest of the week!

Update #3/ Week of March 01, 2010

Good Morning Everyone and Happy Wednesday! Yesterday’s economic news was paltry and so was the volume . . . represented by the fact that at the close of trading, all three indices closed up, but only by single digits. Today’s volume and economic news flow is quite different, but stock indices seem to be heading toward the flat line once again. Yesterday we spoke of the focus of the rest of this week being jobs news and it starts this morning with ADP February Employment numbers.

The ADP, not historically an accurate barometer of unemployment figures, comes out every Wednesday before the Friday when the Labor Dept releases the official unemployment report. Even still, the report released this morning posted a loss of only 20,000 jobs in February -- in line with expectations. However, the January figures were revised upward from 22,000 to 60,000 . . . uuummmm . . . does anyone wonder why this report is almost useless? Wouldn’t we normally get a revision of like 10%? Not 200%? Anyway, it certainly casts a shadow on today’s number. This is the smallest number in a year, but we haven’t seen a positive number on this report since January of 2008 . . . over 2 years now.

The ISM Services Index for February reported a rise to a reading of 53.0 from last month’s 50.5, and better than analysts expectations of 51.0. Bullish traders are trying to take advantage of the news to spark a rally, but it seems to be gaining little traction thus far. Oil prices are back up above $80 a barrel, gold prices site at their high’s for the year . . . and credit markets are flat. In fact, our pricing compared to yesterday’s rate sheet is within a couple bps (1/100ths of a point).

Today’s ADP number and it’s mixed report not only further discredits the validity of this report but gives us no confidence about what Friday’s numbers are likely to be. We’ll have to wait and see what transpires – the fun of being in an industry that’s tied to the markets. Really, would we have it any other way? I will be in the office all day today. Call me here or email me with your loan scenario or pricing question . . . and have a terrific Humpday!

Update #1/ Week of March 01, 2010

Good Morning Everyone and Happy Monday – first day of the week, first day of a new month! We’re back to a normal Monday trading pattern . . . the stock market is up, commodities are flat, and thankfully, the credit markets are holding their own. The stock market is picking up some momentum from the Asian markets’ start to the week. The Hang Seng (Hong Kong’s stock market) was up earlier this morning over 400 points! The dollar is strong today, which typically means a softer equity market, but it does help the credit markets keep stable -- they are just slightly worse than where they closed on Friday.

The Dow last week lost about 75 points and we are just about at that level in the positive on the Dow as I write . . . which means we are almost to the point exactly where we closed on Feb the 19th . . . 6 days of trading with nothing to show for in equities. However, rates have made quite an improvement in those same 6 days. Stocks are rallying on some M&A activity going on today . . . a trend not seen in quite some time, but has been the case the last couple weeks.

Equity markets are dealing with a mixed bag of economic news this morning. The first economic news release was the consumer spending report for January which showed a 0.5% increase, just ahead of the 0.4% increase analysts were expecting. Core personal consumption was flat from the prior month. However, January personal income only rose 0.1%, quite a bit less than the 0.4% for which analysts were looking. The ISM Manufacturing Index for February came in at 56.5, below the 57.9 widely anticipated and a bit less than the 58.4 posted in January. Construction spending for January dropped 0.6% -- in line with expectations.

In Chicago we like March . . . we say “March comes in like a lion and goes out like a lamb.” We look forward to our March here being quite an improvement from February as everyone now seems to have a grip on this new GFE and rates are really good right now. FTHB’s tax credit is still good for a short time (although it’s almost certain that it will have to be extended). I’m in the office all day today if you need me. Call me or email me with your loan scenario or pricing questions. Have a terrific Monday and a very profitable week!

Update #2/ Week of February 22, 2010

Good Morning Everyone and Happy Tuesday! Yesterday we had a very rare negative close in equity markets for a Monday. Yesterday’s small lost of 19 points on the Dow ended a 4-day rally that happened all week last week. Today’s drop in equities appears to be a continuation of that direction as all three indices and commodities are in negative territory. Fortunately for us (I love saying that) credit markets are moving in the right direction and pricing is improved today about (.375) from yesterday’s morning rate sheet. Nice!

The cool mood on Wall Street is in reaction to the consumer confidence report from the Conference Board released this morning at about 7:00 a.m. our time. Up to that point the markets had been moving sideways, but when traders saw that February’s confidence index came in at 46.0 – all markets dropped, including commodities. This is the lowest reading in 10 months, and consumers surveyed blamed the jobs market as the biggest reason for their pessimism. No real news there.

The S&P/Case-Schiller Home Price Index for December came in pretty much as expected. Their reading of 145.9 is just slightly below the 146.3 anticipated. However, the 20-city composite report showed continued year-over-year decline of 3.1%, a bit better than the 5.3% decline posted the month previous. Southern California continues to post modest gains – no real trend one way or the other, so they said in their report this morning. A bottom to this housing market, especially in our State, would be nice. Yet, we have 40-50 BILLION DOLLARS of adjustable notes due to mature here in the next couple years and foreclosures still on the rise . . . and unemployment at near 10% levels . . . no real comfort in housing numbers quite yet.

It sure seems as though activity is picking up though. Maybe brokers are finally getting used to the new GFE . . . and with rates heading south, we all hope to get production numbers back up again. Call me or email me here early and have a terrific Tuesday!

Update #3/ Week of February 15, 2010

Good Morning Everyone and Happy Wednesday! Today’s fractional gains in equities are impressive in light of the rally stocks enjoyed yesterday. The Dow ended the day yesterday with a near 170 point gain! Even better, credit markets improved throughout the day, too! Some of our investors repriced in the afternoon, some didn’t, but we’re pretty much back to where we were yesterday morning on today’s rate sheet. Equities seem to have pocketed the gains from yesterday, and a flat market seems to be in order for today.

Today’s market scene is opposite of yesterday’s . . . gold is down, oil prices are flat (were down earlier), the dollar is showing considerable strength and equity and credit markets are basically flat. Everyone seems to be taking a breather from yesterday’s action. Our pop in stock indices helped to fuel market rallies in Asia and Europe as Asian stock markets in particular rallied nearly 3%.

Housing starts data for January reported this morning a 2.8% rise month-over-month, besting estimates. Building permits, however, fell 4.9% m-o-m, a bit of a surprise to analysts. Much is being made of this report this morning in the financial news, but the housing industry doesn’t really need new houses . . . there’s plenty of inventory out there waiting to be sold to keep us busy for the next several years. Many of those interviewed this morning are pointing toward tax incentives for first time home buyers as a reason for this rise in housing starts. One question, will the tax incentives still be around when these homes are completed? That’s yet to be seen.

I will be coming back to you soon with some updates to our policy for GFE and new disclosures. I want to get these rates to you so we can get some loans locked today. I will be here all day, call me here or email me with your loan scenario or pricing questions . . . and have a terrific Humpday!

Final Update/ Week of January 25, 2010

Good Afternoon Everyone and Happy Friday! Boy, what a busy day today is in financial markets. First of all from yesterday’s news page, Ben Bernanke is confirmed as the head of the Fed for another 4 year term. This is seen as a move to keep markets on the right track, and keep things calm. Ben Bernanke is viewed as a stand out in his own field especially as an expert in his studies on the Great Depression and how to deal with this recession. There were 30 Senators who apparently didn’t feel that way, but he’s confirmed and on board for another 4.

The market should be skyrocketing today with the very impressive GDP reading for the 4th quarter of 2009. Of course, this is based on an almost dead economy the quarters previous, but certainly the heart of the economy (the consumer) is beginning to beat once again. GDP for Q4 ’09 came in at a rise of 5.7%, besting the 4.7% anticipated by the experts. Much of the spending is a result of government stimulus, so may experts are leery that this level is sustainable, but wow, what a number! Last quarter’s number (Q3) showed a rise of 2.2% . . . this after 4 quarters of negative growth. There’s lots more to read about in this report and it’s worth the read. The graphic on the GDP for the last 5 quarters is truly amazing.

Good earnings reports from Microsoft and Honeywell should have propelled the stock market even higher, too. The Univ. of Michigan’s consumer sentiment survey showed a rise to 74.4 . . . higher than the 73.0 reading anticipated. So why isn’t the stock market sky rocketing? Well, I think traders realize that the GDP number, although stellar, is artificial in light of the fact that the gov’t had to put so much money into the economy to get that number. Obviously, we can’t keep doing that. Many financial pundits feel that the market was over sold in the first place and doesn’t really make sense for it to keep growing without a correction.

Credit markets remain flat again today. All week we’ve pretty much stayed within .25 to .375 in rebate with no major breakthroughs. . . . so we did see some improvement in our world in January.

I will be on the road all day today. Please call or email me if I can help you . . . and have a terrific Friday and a very restful and relaxing weekend!

Update #2/ Week of January 25, 2010

Good Morning Everyone and Happy Wet Thursday! Yesterday we joked around about Wall Street being the old man snoring during the rain storm and bumping his head. The Dow dropped yesterday over 200 points right out of the gate, but was able to slowly “get back up” through out the day and ended the session with only a 122 point loss. This morning he appears to be a little disoriented again as he fell out of bed to another 200 point drop and is having quite a struggle getting back on his feet. As of this writing, the Dow is off 212 points, and it appears the long awaited correction is finally happening.

When the market begins to fall like this, we’ve witnessed in recent years, there typically follows a ripple effect as the initial pebble hits the water then there are rings of reactions to the initial drop. The dynamic that’s true of the market most recently is the veritable plethora of day traders sitting at home with the ability to buy and sell stocks from their home computer. In the old days, an individual would have to call their stock broker who might calm them down a bit before selling. Today, when my grandpa for example, gets out of bed and sees another day of triple digit losses on the Dow, he’s likely to run to the computer and sell what he has. This causes continued fall in the stock market and others doing the same. We’ll see how this correction plays out, but that seemed to be the case in late 2008 and early 2009

Selling pressure, especially in the financial sector, is prevalent after President Obama indicated during a speech that there are proposals on the table to limit the size of banks. This is in an effort to not allow banks to get “too big to fail” and “hold the American people hostage” in forcing the average citizens to bail them out if they get in trouble.

Further selling pressure in the stock market could be a reaction to the Initial Jobless Claims report for the week ending Jan 16. It seems 482,000 initial jobless claims were filed last week. That is not a surprise as we talked about this being the case once the holiday help was let go. Analysts, however, were looking for a number closer to 440K, after the week previous came in at 446K. Unemployment is that 800 pound gorilla STILL standing in the corner and hasn’t left the room.

Otherwise, Goldman Sachs’ positive earnings report is having little positive effect on the market. The Philly Fed Index came in much lower, at 15.2, than expected at 18.0 – way down from the 22.5 registered in December. However, LEI increased 1.1%, compared to the 1.0% registered last month. The leading economic indicators and consumer confidence all point toward a bright future someday, but for now, we appear to be stuck in the mud.

I will be in the office all day today. If the rain stops this afternoon, I may get out and make a few calls, but if you need me . . . call me here or email me. I hope you have a terrific Thursday!

Update #4/ Week of January 18, 2010

Good Morning Everyone and Happy Wet Thursday! Yesterday we joked around about Wall Street being the old man snoring during the rain storm and bumping his head. The Dow dropped yesterday over 200 points right out of the gate, but was able to slowly “get back up” through out the day and ended the session with only a 122 point loss. This morning he appears to be a little disoriented again as he fell out of bed to another 200 point drop and is having quite a struggle getting back on his feet. As of this writing, the Dow is off 212 points, and it appears the long awaited correction is finally happening.

When the market begins to fall like this, we’ve witnessed in recent years, there typically follows a ripple effect as the initial pebble hits the water then there are rings of reactions to the initial drop. The dynamic that’s true of the market most recently is the veritable plethora of day traders sitting at home with the ability to buy and sell stocks from their home computer. In the old days, an individual would have to call their stock broker who might calm them down a bit before selling. Today, when my grandpa for example, gets out of bed and sees another day of triple digit losses on the Dow, he’s likely to run to the computer and sell what he has. This causes continued fall in the stock market and others doing the same. We’ll see how this correction plays out, but that seemed to be the case in late 2008 and early 2009

Selling pressure, especially in the financial sector, is prevalent after President Obama indicated during a speech that there are proposals on the table to limit the size of banks. This is in an effort to not allow banks to get “too big to fail” and “hold the American people hostage” in forcing the average citizens to bail them out if they get in trouble.

Further selling pressure in the stock market could be a reaction to the Initial Jobless Claims report for the week ending Jan 16. It seems 482,000 initial jobless claims were filed last week. That is not a surprise as we talked about this being the case once the holiday help was let go. Analysts, however, were looking for a number closer to 440K, after the week previous came in at 446K. Unemployment is that 800 pound gorilla STILL standing in the corner and hasn’t left the room.

Otherwise, Goldman Sachs’ positive earnings report is having little positive effect on the market. The Philly Fed Index came in much lower, at 15.2, than expected at 18.0 – way down from the 22.5 registered in December. However, LEI increased 1.1%, compared to the 1.0% registered last month. The leading economic indicators and consumer confidence all point toward a bright future someday, but for now, we appear to be stuck in the mud.

I will be in the office all day today. If the rain stops this afternoon, I may get out and make a few calls, but if you need me . . . call me here or email me. I hope you have a terrific Thursday!

Warmly,

Update #2/ Week of January 18, 2010

Good Morning Everyone and Happy Wednesday! We have a theme today . . . it’s raining, it’s pouring . . . Wall Street got out of bed this morning, bumped its head and fell to the floor . . . there goes my analogy. The stock market, after hitting fresh 52-week highs yesterday, is dropping like a rock (or a rain drop if you prefer). The Dow is down almost 200 points, the NASDAQ’s off by over 40 points. We’ll have to remember the high from yesterday on the Dow of 10,725 . . . because that may be the high point for some time, I’m thinkin’. The credit markets are rallying today, but secondary marketing investors are slow to jump on board. Look for this trend to continue as rates are better again today . . . but we still have a ways to go.

Stock traders are responding to an announcement from China’s authorities who ordered their big banks to curb lending for the remainder of the month. This move is perceived to be a move toward a tightening of monetary policy in an effort to keep a lid on inflation and an overheating economic recovery. This tightening of monetary policy, interpreted in our country as the Fed raising interest rates, is not an option for us here in the US. The VERY fragile economic recovery (as some would call it) is not ready for an interest rate hike, and we are not really experiencing any inflationary fears at this time.

Even still, China’s Shanghai Composite (their Wall Street stock price measuring equivalent) dropped over 3% on the news, and the European bourses followed suit. As for our country’s economic news releases . . . the December PPI was up a mild .2% month over month. This follows a surprise 1.8% jump in November. Excluding food and energy, the Core Producer Price Index was flat. See what I’m saying about inflationary fears? Housing starts for December were down, coming in at an annualized rate of 557K, when analysts were anticipating 572K. Yet, building permits sky rocketed to 653K (annualized) in December from 589K in November. This figure bested expectations of 580K permits . . . a sign that builders are expecting sales to pick up toward the end of this year and into 2011.

Bank of America reported a $5 Billion loss for the 4th quarter of 2009 . . . nearly double it’s losses in the same quarter of 2008. Loan write offs are the culprit still, and with foreclosures on the rise, it seems like this will be the case for some time. These losses are in line with expectations, but give us a reality check as to just how bad things are still in the financial industry. How many banks could absorb a $5 BILLION losing quarter? Not many.

Oil prices, after making a sharp recovery yesterday, are lower today by 2.4% to $77.06 a barrel. Gold prices are falling . . . down by almost $30. I will be in the office all day today, staying dry – call me here or better yet email me if I can help you. If the rain isn’t too bad tomorrow, I may get out and go make some calls. I’ll let you know in the morning. Have a terrific Humpday!

Final Update/ week of January 11, 2009

Good Morning Everyone and Happy Friday! We’re finally getting the moves in the market that we have been looking for all year. Maybe it’s a reaction to the economic news of the last couple days, maybe it’s traders pulling their bets off the table ahead of a 3 day weekend . . . but equities are sharply down this morning and that is helping the credit markets. The credit markets are gaining steam this morning so far, and pricing is getting better by the hour.

Yesterday’s initial jobless claims report surprised some analysts as they were looking for a seasonally adjusted number of 436K, but the number came in at 444K, up 10K from the week previous. Unemployment and this very weak Labor market continues to be a problem and will be for some time. Small business owners surveyed last week said they don’t see improvement for the rest of the year . . . that is, they are not planning to hire new labor. However, continuing claims continues to fall . . . now down to 4.6M, down 211k from the week previous. This could be a result of some falling off the unemployment assistance rolls.

Yesterday we learned that retail sales were down .3% in December according to the Commerce Dept. Remember, the consumer accounts for 2/3’s of the GDP for our country. Excluding the usual culprit of autos, retail sales were still down .2% -- not good.

This morning we learn that CPI for December increased .1% month-over-month, not as bad as the .2% anticipated by the experts. Inflation is a big concern going forward and economists are very in tune with this report. Oil prices continue to fall, which is good news for all of us. Intel reported good earnings after the bell last night, and so did JPM Chase this morning. However, Chase went on to express concerns about it’s quarter-over-quarter loss provisions. We learned yesterday that foreclosures are still on the rise in our country, so even though banks are profitable, their future potential losses are still a grave concern.

I enjoyed catching up with many of you yesterday. I am in back in the office today and am available for your loan scenario or pricing questions. We will be closed on Monday. Have a terrific Friday and a very restful and relaxing 3 day weekend!

Update #2/ Week of January 11, 2009

Good Afternoon Everyone and Happy Tuesday! As we discussed yesterday, earnings season kicked off (unofficially) last night with Alcoa reporting earnings which missed expectations. Analysts were looking for a profit of $.06 a share and the actual number came in at $.01 a share. Good news is, they only lost about $275 Million this past quarter compared to 1.2 Billion in Q4 of 2008. Great news, eh? Well, traders in equity markets don’t see it is such a positive thing. The Dow is down as of this moment by 70 points, matching it’s earlier low of the session. Chevron also came out with a statement saying that it’s 4th quarter profits were going to be down.

Traders also had to deal with the report released this morning on the November trade balance deficit. In November the actual deficit for our country was $36.4 Billion, quite a bit worse than the $34.6B anticipated and worse from the October number of $33.2 Billion. Oil prices are down slightly for the morning so far, and the dollar is flat.

Credit markets are better in the face of equity markets declining. Our rebates on our 30 year fixed products are anywhere from (.25) to (.375) better than yesterday’s rebates. We look for this trend to continue.

I will be in a monthly sales meeting at 10:00 this morning for about an hour, then I will be available the rest of the day. I hope you have a terrific Tuesday!

Update #1/ Week of January 11, 2009

Good Morning Everyone and Happy Monday! Another Monday, another positive number on the Dow . . . it’s just the way things are. The other 2 major indices are struggling to stay above the unchanged mark, but I think it’s safe to say, equity markets are flat again today. Even so, for the first 6 trading days of the year, we have gained about 200 points on the Dow, after a 120 point drop on the last day of trading for 2009 (a net gain of about 100 points). Credit markets are equally as flat with rates for us improving slightly over Friday’s rate sheet last week (like within .125 in rebate).

There are no economic news releases this morning of note. China announced earlier today that their net exports has finally moved positive, the first time in a year . . . a report that provides some comfort for the global economy as a whole. The slow start for equity markets is a bit of a surprise in light of the fact that the US dollar is quite weak this morning . . . down .7% against a basket of foreign currencies -- this usually feeds a much stronger rise in stock prices.

Earnings season unofficially kicks off this afternoon with the earnings report from Dow component Alcoa due to be released after the closing bell. The rest of the week and the weeks to come should be a wild ride. Although, companies don’t want to be pessimistic at this point of the economic recession. We’re likely to hear a lot of talk about anticipated positive earnings going forward, push for growth instead of watching the bottom line, expansion of labor force and spending . . . and a coming out of the recession in 2010. We’ll see if bullish equity traders can ride that horse to higher stock prices. It will be interesting to watch. Gold prices are on the way back up, so some aren’t so sure we’re going to keep rising in equities.

I will be in the office all day today. Call me here or email me with your loan scenario or pricing questions. Have a terrific Monday and a very profitable week!