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