News You Can Use from Gary Moore

Weekend Market Update

Aug. 7-8, 2010

Stocks closed up for the week, but not after a tumultuous Friday which experienced sharp selling in the morning on the heels of a weak employment report and a recovery of most of the day’s losses by the close. Treasuries and mortgage-backed securities rallied at the expense of stocks, with the 10-year closing at a 2.82% yield, which was a low not touched since April 2009.

Jobs in the private sector increased by 71,000 in July, the Labor Department reported, but that was less than the 90,000 that the market had expected. The unemployment rate remained unchanged at 9.5%. Businesses have added new jobs for seven consecutive months, but the gains are small and suggest the economic recovery will drag out slowly.

The Federal Open Market Committee meets next week, and markets will be reading the Fed’s tea leaves. Don’t expect much variation from Fed Chairman Ben Bernanke’s testimony before Congress last month in which he said the economic recovery would take longer than anyone would like.

Hewlett-Packard stock dropped almost $5 after the market’s close when CEO Mark Hurd was forced to resign for filing false expense reports to cover up a relationship with a female vendor and for seeing that the woman got paid amounts that she did not earn.

With the second-quarter earnings season completed for the most part, stocks may be hard-pressed to find wind for their sails in the coming weeks. Meanwhile, as Treasury yields and mortgage rates have dropped since May, we are experiencing what I call the “Limbo Rock factor.” The popular song from the 1960s posed this question: “How low can you go?” The answer seems to be: This must be it.

While news of low inflation and economic weakness favors Treasuries and mortgage-backeds, increased piling on of such bad news now seems to be having a diminishing effect and is unable to move the markets and rates as it did earlier in this month, Friday’s rally in Treasuries notwithstanding.

Please call me with any questions about the market or to pre-approve you for a purchase loan or to run a free analysis of what a refinance---with cash out or not---would mean for your financial bottom line. Gary Moore 615-579-8658.

30-Year Conventional Fixed

4.25% $200,000-$417,000

15-Year Conventional Fixed

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...by Gary Moore

Mortgage Planner, First Community Mortgage

...a subsidiary of First Community Bank

Cell: 615-579-8658 Toll-free fax: 866-321-6513

“A friend to all is a friend to none.” --Aristotle

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(0% points, 1% origination. Market Update informs consumers and Realtors on market trends, offers subjective opinions and is not a quote for a unique borrower.)