Market commentary

U.S. stocks are sharply lower this morning on disappointment from Friday’s European Financial Summit. While the summit produced some positive headlines most of the difficult problems remain unaddressed, causing Moody’s to place all EU members on review for possible downgrade. U.S. Treasuries have won back most of Friday’s losses as investors again seek the perceived safety of U.S. debt. The yield on the 10 year note has fallen from 2.06% to 1.995%.

While there is no economic data on the calendar for today, this week is full with releases on inflation, industrial production, and manufacturing activity. The main event will be tomorrow’s Fed meeting with the accompanying rate decision and general statement on the economy.

In addition to the full economic calendar the U.S. Treasury will auction 3 year notes today, 10 year notes on Tuesday and 30 year bonds on Wednesday.

The Labor Department reported jobless claims dropped by 23,000 to 381,000 in the week ended Dec. 3. This is the fewest since February, and it is too early to tell if this is a trend or the result of temporary hiring for the holiday season.

The European Central Bank lowered its target lending rate to 1% this morning and ECB president Mario Draghi said the ECB was pursuing more non-standard measures to fight the crisis, including unlimited three-year loans to banks and looser collateral criteria. The markets, however, were disappointed the ECB did not comment further on the possibility of buying debt. This keeps the EU Summit scheduled for Friday front and center on the minds of the global financial community.

Stock and bonds in the U.S. are relatively flat from the market close on Wednesday, as are prices on mortgages.

Market commentary

The economic calendar is light today with the only data coming from the mortgage sector. Mortgage applications for the week ending December 2 bounced back from the previous week’s decline, rising 12.8%. This was driven by a 15% increase in refinance applications and an 8% jump in purchase apps.

It is not an exaggeration to state that the entire global financial community is watching and waiting for the results of the European financial summit scheduled for Friday. U.S. Treasury Secretary Geithner is meeting with leaders this week to help facilitate negotiations and solutions. Any reasonable solution/agreement will certainly cause a selloff in U.S. Treasuries (meaning interest rates will move higher) as investors begin allocating resources to more risky investments. Assuming said agreement is reached I suggest locking prior to Friday.

Market commentary

The fickleness of the markets was evident again yesterday as we saw stock rally early in the day with Treasuries in sell mode. Mid-day S&P announced they were putting 15 European countries on negative credit watch, which caused an immediate deterioration in stocks and a move higher in bond prices. After reaching a yield of 2.11% Monday, the 10 year note is trading at 2.06% this morning.

There is no U.S. economic data this morning and mortgage prices have improved by approximately .125%.

Market commentary

This week will be light on economic data but big on euro drama. The main event of the week will be the EU summit beginning on Friday. The expectation is that a cohesive and substantive agreement will be unveiled at this time, although most have lost confidence in the EU leaders’ willingness to deliver on these big agreements. Anything short of this will extend the global market turmoil.

This morning we saw the November ISM non-manufacturing index, which dropped from 52.9 to 52.0. This is weaker than was expected, although it still reflects a growing economy, but a very slow growth economy. The most concerning portion of this report was a substantial, and unexpected, drop in the employment sub-index. The employment measure dropped from 53.3 to 48.9, the second lowest reading since the economy was still emerging from recession back in the Spring of 2010. This is a big divergence from November’s nonfarm payroll service-sector figures.

The overall positive ISM report and hopefulness of this Friday’s EU meeting has stocks in rally mode again. As one would expect, the rally in stocks is pushing bond prices lower. Mortgage pricing is worse by .125% to .25%.

Market commentary

This morning it is all about the November labor reports. Total nonfarm payrolls rose 120,000, slightly below expectations of +125,000 but well below the rumored 180,000 to 200,000. There were also 52,000 jobs added to the September report and 20,000 added to the October report. The public sector lost 20,000 while the private sector gained 140,000. Average weekly hours worked were flat at 34.3 but on the negative side, average hourly earnings fell from $23.20 to $23.18.

In the household report, the unemployment rate fell from 9.0% to 8.6%. Before getting too excited about the drop in the unemployment rate, the main reason this percentage fell is due to 315,000 folks dropping out of the labor force entirely.

Treasuries initially sold off on the seemingly strong jobs data, however, as the markets digested the details bond prices reversed and are now higher on the day. Mortgage pricing is better by approximately .125%.

Market commentary

Wednesday the Dow rose 490 points, blowing through 12,000, on a swing in market sentiment resulting from the coordinated efforts of major central banks around the world, and positive economic data in the U.S.

This morning initial jobless claims jumped back above 400,000 to 402,000 for the week ending November 26. This is the first time in five weeks that the measure has been above 400,000.

With some positive news, the November ISM Manufacturing Index rose more than expected 52.7 from 50.8. Expectations were for a small increase to 51.8. Overall this was a solid national report confirming that orders are still outpacing production.

Keeping with this week’s pattern, Treasury and mortgage bonds are opening weaker, with mortgage prices worse by .25%.