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!