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!