Market commentary

Initial jobless claims rose more than expected for the week ending August 20 to 417,000, which is now 19 of 20 weeks that claims have been above 400,000. Bond prices have improved after the release of this data and stocks are retreating. Later today the U.S. Treasury will auction $29 billion of 7 year notes after a fairly successful 5 year note auction on Wednesday.

We are now less than 24 hours from Fed Chairman Bernanke’s speech scheduled on the last day of the Jackson Hole central bankers’ conference. The title of the speech is “Near and Long Term Prospects for the U.S. Economy”. Speculation remains about the content of the speech and what monetary policy tools Bernanke may reference. Keep in mind, however, the Fed has policy has reached unprecedented levels of accommodation and the U.S. economy still struggles. The real problems now are fiscal and regulatory in nature, as the President and Congress have low marks for leadership and understanding of policies that promote growth. One could say fiscal and regulatory policy has mostly stifled the benefit from the Fed’s easy monetary policy.

After Wednesday’s decline and mid-day price changes for the worse, mortgage prices are improved this morning by approximately .125%.