Market Insight
Have you metChad?
Rates Steady...4.625% range for purchase money. WOW.
FNMA 4% bond gave up just 6bps today after some bond friendly news this morning.
ADP employment report came out showing a LOSS of 742,000 jobs...which was WAY higher than expected. However: other stats for the month of March may indicate that corporate layoffs have bottomed out. Now we are ready to start rebuilding…hopefully.
What is it?
The ADP employment report is put out by ADP which is responsible for payroll for thousands of US employers. It comes out the same week as the Jobs report and provides a "preview" to what that may look like. Usually this type of job "loss" news is really good for the bond market. However: so many things are not exactly acting like they have in the past. Some of this is due to the fact that there are still investors pulling money out of the markets...to put in their mattresses. SO: Usually when money flows out of bonds...it goes into stocks...or vice versa we can predict what news will be "bond" friendly or "stocks" friendly. When people just pull money out of the markets though...there is no predictable flow between the two markets. Investors are buying commodities like gold or other things that have "international" appeal.
G20...Has anyone seen this in the news? G20 is a financial "summit" of sorts where representatives from the 20 largest economies get together and discuss the international state of affairs. (19 of the world's largest economies PLUS the European Union.) In years past this gathering over economies has not been extremely insightful or impactful necessarily...but with the state of things worldwide: there are many who are watching these discussions with a greater interest. The "summit" has taken place since 1999. To learn more: http://en.wikipedia.org/wiki/G20_industrial_nations
Existing home sales are UP! Home starts are UP! Some economists feel that this is just an indicator of "Spring" or "GREEN SHOOTS" but I am excited to hear any good news at this point.
ISM index...which is based on surveys of 300 reps at major manufacturers...came in better than expected today as well.
DOW was UP 152 points today.
Oil is down in the 40's again closing out at about $47.00.
FASB…Remember Mark to Market Accounting? This is the requirement that has caused such HUGE concern for financial institutions. (Remember that BILLIONS in "wealth" evaporated overnight…when values were having to be established based on "fire sales" of assets. Banks were forced to sell assets to avoid getting shut down…and created MORE fire sales…which evaporated more wealth (on paper) and led to a need to further deleverage. Vicious.) There is talk that tomorrow the requirement may be lifted…even temporarily. This could have a HUGE impact on financial stocks since banks will no longer face requirement to deleverage or get shut down… We will have to see what happens.
Happy Selling!
