Initial jobless claims for the week ending October 8 came in at 404,000 versus the previous week’s 405,000, making twenty-five of the past twenty-seven weeks in which we have seen claims above the 400,000 mark.
Wednesday the U.S. Treasury auction of 10 year notes was an ugly affair that sent bond prices a little lower with the yield on the 10 year note closing at 2.24%. Today’s auction of 30 year bonds will be the final leg of this week’s auctions. Bond prices are improving today as U.S. stock markets are weak. JP Morgan Chase announced third quarter earnings 4% lower than this time last year, and its share prices are trading lower, dragging other financial stocks along for the ride. The yield on the 10 year note has fallen to 2.155% and prices for mortgages are improved by .125% to .25%.
The Minutes from the Fed’s September meeting, released yesterday, show that the Fed is increasingly concerned about economic growth. "The risks to the growth outlook…were significant and tilted to the downside." After discussing several options, it was agreed the Fed would begin selling shorter term Treasuries to purchase longer term Treasuries, also known as Operation Twist. This is what helped push the yield on the 10 year note to 1.74% just days after the announcement.
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