Market Analysis

Stocks moved up today in early morning trading and sustained the momentum this afternoon. The Dow finished up over 200 points to finish at 10,674. Bonds opened down and worsened in late afternoon trading. So far the impact is not visible in mortgage rate sheets. If the market opens down again tomorrow we will most likely see same rate closing costs inch up. Stocks responded in the early am to strong earnings reports from European Banks HSBC and BNP Paribas and then were buoyed by the June Construction Spending Report which was up .1% vs an expected decline of .8% and the July Institute of Supply Management July Manufacturing Sector Index which was down less than expected at 55.5 compared to expectations for a 54.2 reading. June’s index was 56.2.

Below is a recap of the economic calendar for this week:

Monday, August 2, 2010

• June Construction Spending – came in up .1% vs expectations of a .8% decrease. However, May Spending was revised to -1.0% vs initial reports of a -.2% decline.
• July Institute of Supply Management Manufacturing Sector Index – reading of 55.5 vs expectations of a 54.2 reading and a 56.2 June value.

Tuesday, August 3, 2010

• June Personal Income and Spending – Incomes expected up .1% vs a .4% increase in May and Spending expected no change vs a .2% increase in May
• June Personal Consumption Expenditure (PCE) Index (a measure of inflation at the consumer level) – expected up .1% vs up .2% in May.
• June Factory Orders – expected down .5% vs May down 1.4%
• June Pending Home Sales – expected down .5% vs May down 30%

Wednesday, August 4, 2010

• July ADP Employment Change Report – expected private sector increase of 25,000 vs 13,000 increase in June

Thursday, August 5, 2010

• Initial Jobless Claims Week Ended 7/31 – expected down 2,000 to 455,000 from 457,000 the prior week.
• Continuing Jobless Claims Week Ended 7/24 - expected down 25,000 to 4.530 million from 4.565 million the prior week

Friday, August 6, 2010

• July Non Farm Payroll Report – expected decrease of 87,000 with an expected increase in private sector increase of 82,500 being offset by an expected public sector decrease of 169,500 due to a decrease in temporary census works
• July Unemployment Rate – expected to inch up to 9.6% from June’s 9.5%.
• June Consumer Credit – expected down $5.7 billion vs a decline of $9.1 billion in May