Continuing Claims took a dip, falling 48K to 4.295 million. Weekly Unemployment Claims crept higher this morning, up 2K to 439K. The readings appear to confirm a stable to downward trend in unemployment claims and although hiring is weak, signs of labor demand are starting to be seen.
That fact is evident in the four-week moving average which is now at its lowest level since September 2008. Leading Economic Indicators were also on the docket, up .5% in October. The monthly gain appears to be broad based, adding to the momentum of gains posted in the last two months. Keep in mind that the release is thought of as a “rear view mirror” piece of data, one that traders typically push to the back burner.
Today’s Philly Fed Survey did the Gomer Pyle this morning, surprising to the upside in a big way. The index jumped 21.5 points to 22.5, the best reading since April 2005. Manufacturing, specifically the new orders component did the trick, rising from -5.0 to plus 10.4.
GM’s IPO, making the stock market giddy, hasn’t helped either. The big board is plus 180. Technically, we talked about the chart looking corrective in nature. That was the correct call as yesterday’s rally could not even get to the 38% retracement level, falling short by a couple of 32’s. The failure to penetrate that resistance brought in selling and pushed the market back into a bearish trend.
We feel that near term price action will focus on further downside (higher Austin mortgage rates/worse pricing) as we have yet to find a bottom. If there is a ray of hope, it will be that the 10 year note can hold at or below 2.95% (currently 2.93%). Best bet for Texas mortgage borrowers is to stay defensive. Before the market picks your pocket, lock your mortgage loans with the float down option (“option to lower your interest rate one time”)!
