Wednesday, July 6, 2011

Morning Update/ Market Thread 7/6

Good Morning,

Equity futures are lower this morning with the dollar higher, bonds higher, oil higher, gold & silver significantly higher, and most food commodities lower.

Note the nice bounce in the dollar right off support. Again, the break of this triangle will tell us the mid-term direction to come:

The conflicted Mortgage Banker’s Association reported Purchase Applications supposedly rose by 4.8% in the past week, but that Refinancing Activity fell by an unbelievable 9.2% in just the past week alone. No, I don’t believe swings of that size are real, they are a product of the MBA’s conflicted and convoluted reporting techniques. Here’s Econogullible:
Up 4.8 percent in the July 1 week, the purchase index ended a soft month on an up note. The gain came despite a big rise in mortgage rates that the Mortgage Bankers Association attributes to strong economic data late last week together with the end of QE2. Rates jumped in the week led by a 23 basis point rise in the average 30-year mortgage to 4.69 percent. Refinancing activity dipped sharply on the rise in rates with the refinancing index down 9.2 percent.

Whatever, anything the MBA says regarding their own industry is not believable and is not to be taken seriously.

The Challenger Job-Cut Report shows an increase in mass layoff announcements, rising from 37,135 in May, to 41,432 in June, an increase of 11.5% in the month:
Layoff intentions remain subdued according to Challenger's count which comes in at 41,432 in June vs 37,135 in May and vs 39,358 in June last year. At 10,176, layoffs in June were heaviest in the government/non-profit category.

The non-manufacturing ISM is released at 10 Eastern this morning.