July 6, 2010

The economic news last week indicated that the economy is sputtering.  Consumer Confidence came out Tuesday, dropping almost 10 points (52.9 act. vs 62.5 est.), as people are worried about the outlook for jobs and incomes.  Then on Thursday, jobless claims showed there are still a large number of people filing for unemployment benefits (472k act. vs 455k est.), and the Institute for Supply Management Manufacturing came in lower than expected (56.2 act. vs 59.0 est.), but still showed expansion, as indicated by a reading above 50.  Finally, on Friday, the nonfarm payrolls number was slightly better than expected (-125k act. vs -130k est.), if a negative can be a positive, as government census workers rolled off, and the private payrolls number was slightly less than expected (83k act. vs 110k est.), but positive for the sixth month in a row, showing that at least private employers are hiring.

This week, there is hardly any economic data; the main number is today’s ISM Non-Manufacturing (53.8 act. vs 55.0 est.) for a reading on approximately 90% of the economy.  Like ISM Manufacturing, the number was lower than anticipated, but still showed expansion, as the reading above 50 indicates.  We also will get rate announcements from both the European Central Bank and the Bank of England on Thursday, and both are expected to announce no change.

			Expected		Previous
7/5	Monday	July 4th Holiday Observed
7/6	Tuesday	ISM Non-Manufacturing (Jun)	55.0%	vs	55.4
7/7	Wednesday
7/8	Thursday	Consumer Credit (May)	-$2.0B	vs	$1.0B
		ECB and Bank Of England meeting
		Jobless Claims (Jul 3)	460k	vs	457k
7/9	Friday	Wholesale Inventories (Jun)	+0.4%	vs	+0.4%

Treasury Curve

Maturity	Yield 7/5/10	Monday 6/28/10
1-Year	0.30	0.31
2-Year	0.62	0.65
5-Year	1.80	1.88
10-Year	2.97	3.09
30-Year	3.94	4.05

	7/2/10	+/-	7:00 A.M.	+/-
Dow	9686.48	-46.05	9806.36	+119.88
MSFT	23.27		23.79	+0.52
BA	61.94		62.10	+0.16