As expected, the Jobs Report came out below expectations.  At 51,000 jobs created in Sept., it was well below expectations.  We haven’t had this low of a representation since Hurricane Katrina hit the Gulf Coast last year.  The Hourly Earnings component being down to 0.2% from the expected 0.3%, reduces fears of wage pressured inflation ...good news for Bonds.   

The Bond market had already been pricing in a miss on the heels of the weak ADP report.  Today's negative Bond market reaction is also due to short-term Traders looking to make a quick buck when they saw the market going against them and quickly sold their Bond holdings, creating an exaggerated sell off.  

So although Bonds made a surprise move lower there is now hope for pricing to improve from present levels.  The short-term Traders are out of the market.  We should see some correction next week.

As usual, the market can be a fickle creature; full of surprises and unexpected direction changes. All in all though, there is no reason to believe that any drastic changes will occur. When interest rates move upwards, even a slow movement upwards, it is common the hear remarks about worsening rates. Are they bad though? Not by a long shot. Interest rates now are still much lower than they were when I purchased my first property in the mid-1980’s.

 
Posted by Mark Flanders on 10/06/2006 05:26 PM   Comments (1)  
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1 Comments on Interest Rates Are Good!

OCT
08
2006
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Yes I woudl agree, we are no where near the horrid rates that we had years ago. Anything under 8% is still atractive. What we had for so long could not last. It just help the economy and open more doors for people to get in to home that they might not be able to afford.
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Mark Flanders

Silverdale, WA

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