Hello Friends!
I am sure you are all disappointed today but no video of me. :) My daughter woke up with a fever and cold and my wife had two fitness classes to teach back to back and no sub, so I am with my sweet little daughter who is asleep on my left shoulder. That would make for a cute video update though.
Well, the GDP (Gross Domestic Product) numbers came in slightly lower then expected but to add to the fun, the first quarter had revisions lower as well. These weren't big market movers in itself but the next report came out and a BIG spike in jobless claims was reported. It was predicted to have 404,000 jobless claims but actually came out at 448,000 the largest on month jump since 2005.
I would expect the market to react more but there is a new federal benefits program that is just now being reported and analysts feel the number was elevated due to more accurate reporting to hit the wires.
Tomorrow is the unemployment numbers for July, they predict a 70,000 loss but it could be much less due to a flawed system the Labor department uses to predict these numbers called the "birth-death rate". This is not the birth or death of people but of businesses. So in a down market and tough economy, it skews past "birth-death" averages.
So if the number comes in near flat with no loss as some are predicting, we could see a big drop in bond prices and a significant rise in mortgage interest rates. So I am locking my files for my clients and recommending you do the same as we have recovered 150 basis points from two weeks ago when the Fannie Mae and Freddie Mac debacle hit main stream media.
I hope this helps. Until tomorrow, as always, Be Blessed!
Travis
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