Weekly Claims continues its volatile pattern, dropping by 42K for the week ending January 29th. Many blame the weather but just same, we are seeing 40K to 50K swings up and down on a weekly basis. Probably the best indicator or this index is the four week moving average, now close to 430K. It’s getting better but ever so slowly. Continuing Claims fell 84K to 3.925 million which did not include many on extended and emergency benefits. Still slow going for those out of work. Factory Orders rose for the first time in eight months, up .2% in December 2010. The print was in line with consensus and points to a recovery in manufacturing. ISM Nonmanufacturing Index was also released, up 2.3 points to 59.4. This is the best level seen since the recovery began. This portion of the larger ISM Index, fixates on the services sector and is pointing to strength that will promote a labor market rebound and help to drive economic expansion. It’s just a matter of time. Even though the data was bullish for the economy, stocks and bonds are both in the red. Continued escalation in Egypt seems to be bugging stocks while today’s data and sour technical’s are pushing yields higher and worsening mortgage pricing. Currently, the 10 year note is off 5/32’s (yield 3.51%), mortgage backs are down 5/32’s, and stocks are off a dozen on the big board. On the chart, the 10 year note is testing the January low (yield of 3.56%) and if we can hold, the bulls will still have hope. Trouble here is that yesterday’s close triggered a trend line break which included bearish readings on 8 day ADX. In English, the market trades like a dog so don’t trust it. Today is however set up day for the mother of all data, tomorrow’s Employment Report for January. We’ll preview the report later today.
Scott S. Eggen
Senior Vice President – Capital Markets
PrimeLending, A PlainsCapital Company
18111 Preston Road, Suite 900
Dallas, Texas 75252
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