money-ship-artWeekly Unemployment Claims hit the tape plus 8K to 652K and Continuing Claims rose to 122K, a new record high 5.56 million.  Continuing Claims has risen a startling 40% in 4 months.  Stimulus plan, where are you?

Final 4th Quarter GDP was also released, down 6.3%.  Although punishing, the number was close to expectations (previous -6.2%) with a large drop in private domestic investment pushing the figure lower by .1%.  This “should” be the worse quarter we’ll see as more and more stability/growth seeps back into the economy.

Treasury Secretary Geithner has gathered with Barney and friends on the hill, outlining financial reform to reduce systemic risk for non-financial institutions (think AIG).  Geithner proposes a single regulator with responsibility to maintain stability throughout the financial system.  Plans were also outlined to allow the government to wind down systemically important failed companies.

On the auction block, 24 billion of 7 year notes will come to market at high noon (CST) today.  The issue is the second seven year since reopening the “odd duck” which was shelved for many years.  Traders are a little apprehensive due to the failed 40 year Gilt auction in the UK.  What happened here was there were less bids than paper available, constituting a failed auction.  Interesting on our side of the pond, T-Bills actually traded negative today, meaning that you would have to pay the government to own them.  Maybe they slipped that in the Budget.

All of the above has done little to move a quiet, Thursday market.  Stocks up a C note on the big board, 10 year note up 3/32’s (yield 2.76%), and mortgage backs up 2/32’s and holding.  Technically, daily studies lean toward the bulls while hourly time frames remain bearish.  Buy signals are present on Stochastics and MACD, but recent failures to trend higher (rally) have not been present.

Kind of a Goldilocks market, not to hot , not to cold, but just right.  We’ll stick to our story that the worse in over with mortgage rates rising, pricing worsening since a week ago Wednesday so a little improvement should be in order.