Initial Jobless Claims rose again last week continuing their disturbing trend. Claims rose from 488k last week (revised up 4k from 484k) to 500k. Survey expectations were for claims to come in 22k lower at 478k. This continues to bode poorly for the labor market. Ironically, this release comes out on the same day Intel announces that they are purchasing McAfee for $7.68B in cash.
The Fed finished their initial week of re-investing cash-flows from the MBS portfolio, so we can look for the markets to set-up for next week’s Treasury auctions of $36 billion or 2 year and 5 year notes and $28 billion of 7 year notes. Wednesday afternoon we saw the beginning of this as investors sold treasuries taking mortgage bonds down with them, and causing most lenders to re-price their rate sheets for the worse.
This morning U.S. stocks are trading lower in spite of the Intel acquisition news while the bond market is flat from the close on Wednesday.
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