Market Update
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This is not from me but from the president of largish mortgage bank that I've know for some time. He is kind enough to include me on his updates to his big money investors. It's not meant as any type of investing advice rather just his opinions on the market and how he sees it relate to mortgage futures.
Once again, it is time for the high profile jobs report. Set for tomorrow at 7:30 am cst, market expectations are for the following; Nonfarm Payrolls – Minus 524K jobs Unemployment Rate – 7.5% Hourly Earnings – Plus .2 Hourly Workweek – 33.3 hours If you look at the industry by industry numbers, along with the weekly unemployment claims used in this report, the number looks closer to minus 499K. The wildcards are construction and manufacturing on the goods producing side and retail/professional on the services producing side. We see this group as fairing worst than expected, taking the jobs number closer to minus 550K/560K. Likewise, the unemployment rate looks to us to be more in the neighborhood of 7.6%/7.7%. Surging layoff announcements (jumping) and regional manufacturing reports (dropping) also help build our case. What are others saying; ING minus 750K and 7.5%, Merrill Lynch minus 600K and 7.6%, and JPMorgan minus 550K and 7.1%. As we have said in the past, the Employment Report is the highest profile, most market volatile piece of economic data to hit the street each month. Given our estimation is correct, we would expect stocks to suffer and bonds/notes/mortgage backs to improve. The higher the jobs loss number, the more the market will rally. Any number below 500K in jobs loss should send the Dow up 400 to 500 points, feeling as if the worst is behind us. Mortgage pricing would take a dip given that number. Our bias would be for stable to lower mortgage rates/better mortgage pricing post release and feel the jobs number will justify it. Ask me about using the float down to allow for a better rate if the rally occurs. Dice rollers are living on the edge with this market.
Sovereign ingredient for a happy marriage: Pay cash or do without. Interest charges not only eat up a household budget; awareness of debt eats up domestic felicity. --Lazarus Long Avoid the crowd. Do your own thinking independently. Be the chess player, not the chess piece. --?
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This is not from me but from the president of largish mortgage bank that I've know for some time. He is kind enough to include me on his updates to his big money investors. It's not meant as any type of investing advice rather just his opinions on the market and how he sees it relate to mortgage futures.
Once again, it is time for the high profile jobs report. Set for tomorrow at 7:30 am cst, market expectations are for the following; Nonfarm Payrolls – Minus 524K jobs Unemployment Rate – 7.5% Hourly Earnings – Plus .2 Hourly Workweek – 33.3 hours If you look at the industry by industry numbers, along with the weekly unemployment claims used in this report, the number looks closer to minus 499K. The wildcards are construction and manufacturing on the goods producing side and retail/professional on the services producing side. We see this group as fairing worst than expected, taking the jobs number closer to minus 550K/560K. Likewise, the unemployment rate looks to us to be more in the neighborhood of 7.6%/7.7%. Surging layoff announcements (jumping) and regional manufacturing reports (dropping) also help build our case. What are others saying; ING minus 750K and 7.5%, Merrill Lynch minus 600K and 7.6%, and JPMorgan minus 550K and 7.1%. As we have said in the past, the Employment Report is the highest profile, most market volatile piece of economic data to hit the street each month. Given our estimation is correct, we would expect stocks to suffer and bonds/notes/mortgage backs to improve. The higher the jobs loss number, the more the market will rally. Any number below 500K in jobs loss should send the Dow up 400 to 500 points, feeling as if the worst is behind us. Mortgage pricing would take a dip given that number. Our bias would be for stable to lower mortgage rates/better mortgage pricing post release and feel the jobs number will justify it. Ask me about using the float down to allow for a better rate if the rally occurs. Dice rollers are living on the edge with this market.
Sovereign ingredient for a happy marriage: Pay cash or do without. Interest charges not only eat up a household budget; awareness of debt eats up domestic felicity. --Lazarus Long Avoid the crowd. Do your own thinking independently. Be the chess player, not the chess piece. --?
Chris Austin wrote:
Any number below 500K in jobs loss should send the Dow up 400 to 500 points
The figure I heard tonight is that the loss will be in the 650K range. Considerably higher than expected. :(
Jon Smith & Wesson: The original point and click interface Algoraphobia: An exaggerated fear of the outside world rooted in the belief that one might spontaneously combust due to global warming.
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Chris Austin wrote:
Any number below 500K in jobs loss should send the Dow up 400 to 500 points
The figure I heard tonight is that the loss will be in the 650K range. Considerably higher than expected. :(
Jon Smith & Wesson: The original point and click interface Algoraphobia: An exaggerated fear of the outside world rooted in the belief that one might spontaneously combust due to global warming.
Yeah, he was pretty pessimistic in his personal side note as well.
Oakman wrote:
The figure I heard tonight is that the loss will be in the 650K range.
That is a mind numbing number. Did we hit 1 million jobs lost in '01-02 after the tech bubble and 9/11?
Sovereign ingredient for a happy marriage: Pay cash or do without. Interest charges not only eat up a household budget; awareness of debt eats up domestic felicity. --Lazarus Long Avoid the crowd. Do your own thinking independently. Be the chess player, not the chess piece. --?
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Yeah, he was pretty pessimistic in his personal side note as well.
Oakman wrote:
The figure I heard tonight is that the loss will be in the 650K range.
That is a mind numbing number. Did we hit 1 million jobs lost in '01-02 after the tech bubble and 9/11?
Sovereign ingredient for a happy marriage: Pay cash or do without. Interest charges not only eat up a household budget; awareness of debt eats up domestic felicity. --Lazarus Long Avoid the crowd. Do your own thinking independently. Be the chess player, not the chess piece. --?
Chris Austin wrote:
That is a mind numbing number
I agree. I think that may be why Obama seems to be running scared suddenly. I'm no more in favor of throwing money at the problem than I was before, but if he knows more than we do (and he does) the news may be all bad.
Jon Smith & Wesson: The original point and click interface Algoraphobia: An exaggerated fear of the outside world rooted in the belief that one might spontaneously combust due to global warming.