US Stocks have turned positive on the day, and are pushing higher on "not as bad as it could be" economic news.  Mortgage Bonds are down, struggling to maintain pricing at technical support levels.  

US Stock Markets close at 1 PM EDT for the holiday, and trading has been fairly volatile so far.  Worries that the economy is continuing to get worse were softened as the official jobs report showed unemployment only slightly worse than expected. However, the report shows initial claims above expectations with the 2nd highest number in 3 years, and the continuing average now at a 4 year high.  As predicted by the ADP report, the service sector lost jobs for the first time in nearly 6 years.  Oil hit another record (again - ugh!) at $145.85 in electronic trading, but has retreated back under $144.  This is can be traced to an increase in the Dollar, following an expected interest rate hike by the European Central Bank.  

Mortgage Bonds have been all over the board today, and are currently trading at their 10 day average (a level of support).  The bad news for the economy from the ISM Services Index report, and the jobs numbers, have not helped Bonds as one would expect.  This may be due to lower volume, and the shorter trading day in conjunction with a patriotic holiday bump.  There has been really no reaction to the ECB's interest rate increase, since the move was highly anticipated.  

I am once again floating rates, although Bonds have dipped below support levels.  The trend lines are fairly flat, and the shortened day, along with lower volumes, should not produce any significant swings heading into next week.  The economic calendar does not have any upcoming major impact reports, so Bonds will continue to react to Stocks, and there is little reason to believe we will see a significant rise in the near future.   Make it a great day! 

Ron Brown

615 E Pioneer Ave.
Puyallup, WA 98372
(253) 520-0000