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!