Sep
30
2009
Headline News and Market Report
Author: Randall GoltzmanWednesday, 9/30/09
The MBA Weekly Mortgage Applications Survey: The Market Composite Index down 2.8%, The Refinance Index -0.8%, and the Purchase Index -6.2%. The refinance share of all activity increased to 65.3% of total apps, and the ARM share of activity decreased to 6.2%. The average 30 yr rate decreased to 4.94% from 4.97%, and the average 15 yr rate decreased to 4.34% from 4.41 percent, the lowest 15-year fixed-rate ever recorded in the survey. The average rate for one-year ARMs decreased to 6.40% from 6.52%.
ADP Employment Report: U.S. Lost 254,000 Private-Sector Jobs in September, a greater loss than the 240,000 drop projected by economists. The estimated change of employment from July to August was revised from a decline of 298,000 to a decline of 277,000. The ADP survey tallies only private-sector jobs, while the Bureau of Labor Statistics’ nonfarm payroll data, to be released Friday, include government workers. Expectations for the BLS to report due Friday are for September job cuts totaling 175,000, down from 216,000 jobs lost in August. However, the ADP survey, along with other worse-than-expected data, suggests some economists may raise their estimate of job losses before Friday’s number. The September unemployment rate is projected to rise to 9.8% from 9.7% in August.
Gross Domestic Product decreased 0.7% in 2Q 2010, revised from the earlier estimated 1.0% drop because business spending in the quarter wasn’t as weak as initially thought. The 0.7% decline in GDP 2Q10 was softer than in the darkest days of the slump, when GDP plunged 5.4% in fourth-quarter 2008 and 6.4% in first-quarter 2009. Consumer Spending, the biggest component of GDP, decreased 0.9%, compared to the previously estimated 1.0% drop and the first quarter’s 0.6% decrease. The GDP component that includes spending on housing decreased 23.3%, compared to the previously estimated 22.8% tumble and the first quarter’s 38.2% drop.
Chicago Purchasing Managers’ Index Unexpectedly Fell to 46.1 in September, weaker than consensus estimates of 52, and a fall back to levels indicating contraction after the index hit 50.0 in August. Any reading below 50 indicates contraction. The new orders index backtracked to 46.3% from 52.5% in August. The employment index was essentially unchanged at 38.8%.
Treasuries Little Changed After a Slew of Numbers. Soft PMI Data Lift Treasurys after earlier selling on a better-than-expected gross domestic product for the 2Q. Philadelphia Fed President Charles Plosser said the central bank should tighten credit “promptly” when necessary to avert a recurrence of the high U.S. inflation during the 1970s. “Our credibility depends on it,” Plosser said yesterday in a speech “We recognize the costs that significantly higher inflation and the ensuing loss of credibility will impose on the economy if we fail to act promptly, and perhaps aggressively, when the time comes to do so.” Futures on the Chicago Board of Trade show a 2 percent chance the Fed will raise its target rate for overnight lending between banks to 0.5 percent by its meeting on Dec. 16. Central banks around the world are showing signs of moving towards exiting from their extraordinary measures as the shortage of credit eases. The IMF has raised its forecast for global economic growth next year to 3.1% from 2.5%. The Treasury will announce tomorrow plans to sell $39 billion in three-year notes, $20 billion in 10-year notes, $12 billion in 30-year bonds and $7 billion of 10-year TIPS next week.
Mixed Data Show Fragility of Recovery. Home prices rose in July, but apprehension among consumers and chief executives underscored the fragility of the nation’s economic recovery.
Economic Indicator News Release Calendar
OCTOBER
MONDAY TUESDAY WEDNESDAY THURSDAY FRIDAY
01
Initial Claims (Weekly)
(08:30)
Personal Income
(Aug) (08:30)
Pending Home Sales Index
(Jul) (10:00)
Construction
(Aug) (10:00)
Auto and Light Truck Sales
(Sept) (04:00) 02
Employment Situation
(Sept) (08:30)
Mfr.Shipments, Inventories and Orders
(Aug) (10:00)
05 06 07
Consumer Credit
(Aug) (03:00) 08
Initial Claims (Weekly)
(08:30)
Wholesale Trade
(Aug) (10:00) 09
Trade Balance
(Aug) (08:30)
12
Columbus Day 13
Treasury Statement
(Sept) (02:00) 14
Advance Retail Sales
(Sept) (08:30)
Imports/Exports
(Sept) (08:30)
Business Inventories
(Aug) (10:00) 15
Real Earnings
(Sept) (08:30)
Consumer Price Index
(Sept) (08:30)
Empire State Manufacturing Survey
(Oct) (08:30)
Initial Claims (Weekly)
(08:30)
Philadelphia Fed Survey
(Oct) (10:00)
Cleveland Fed Median CPI
(Sept) (11:00) 16
Industrial Production and Capacity Utilization
(Sept) (09:15)
19 20
New Residential Construction
(Sept) (08:30)
Producer Price Index
(Sept) (08:30) 21
Beige Book
(02:00) 22
Initial Claims (Weekly)
(08:30)
Composite Indexes
(Sept) (10:00)
OFHEO Monthly House Price Index
(Aug) (10:00) 23
NAR Existing-Home Sales
(Sept) (10:00)
26
Chicago Fed National Activity Index
(Sept) (10:00)
Dallas Fed Manufacturing Survey
(Oct) (11:30)
Chicago Fed Midwest Mfg. Index
(Sept) (12:00) 27
Revised Building Permits
(Sept) (08:30)
S&P/Case-Shiller Home Price Indices
(Aug) (09:00)
Richmond Fed Survey
(Oct) (10:00)
State and Local Building Permits
(Sept) (10:00)
Consumer Confidence
(Oct) (10:00) 28
Advance Durable Goods
(Sept) (08:30)
New Residential Sales
(Sept) (10:00)
Metropolitan Area Employment and Unemployment
(Sept) (10:00) 29
Initial Claims (Weekly)
(08:30)
Gross Domestic Product (Advance)
(3Q) (08:30) 30
Personal Income
(Sept) (08:30)
Chicago Purchasing Managers Index
(Oct) (09:45)