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Wednesday, January 6, 2010

Morning Market Report

The prelude to the all important jobs report just got announced. That's the ADP private sector jobs report.

ADP said December job losses dropped to 84,000, below the 90,000 estimate and well below the revised November decline of 145,000.

In a separate report, job outplacement firm Challenger, Gray & Christmas said planned layoffs were at 45,094 in December, the fewest since December 2007.

Some months there's little to no difference between the two and other months they have little relation to each other. In November, there was a spread of about 150,000 jobs. This is still weak but it's getting better. It still portends that the first monthly job gain is on the way. So, we will wait and see what happens on Friday.

Markets are flat. This data gave them no reason to move one way or another. The Dow is pushing 10600 again. It's currently at 10588. Bonds are relatively flat. The ten year is off by nearly two basis points. It's at 3.77%. That's the same as it was this time yesterday. The yield spread between the two and ten year is just slightly higher as well. That's at 2.76%. The three month t bill has gotten slightly better. That yield has dropped to .056.

Crude oil is about steady. It's trading at $81.75 a barrel. That's off a couple pennies. Gold is up $9 an ounce to $1127 an ounce. That's just slightly higher than this time yesterday morning.

It was generally good across the board in both the Far East and in Europe. The Hang Seng was up .62%, the NIKKEI in Japan was up .46%, and the Straits Time Index in Singapore was up .35%. The FTSE in London is up .13%, the DAX in Germany is up .05%, and the Spanish index is up .03%.

The dollar is off the Euro by .16%, up by .03% against the British Pound, and up .97% against the Japanese Yen.

Finally, here's a story from Bloomberg that's up my alley.

Losses on commercial real estate loans pose the biggest risk to U.S. banks this year, troubling smaller lenders while unlikely to threaten the entire financial system, U.S. bank examiners concluded during a review.

“Losses from commercial real estate will be quite high by historic standards,” said Eugene Ludwig, former Comptroller of the Currency who is now chairman of Promontory Financial Group, a Washington-based consulting firm to financial institutions. “Hundreds of banks will fail or will be resolved over the course of the cycle.”

2010 will be a very vital year in commercial real estate. It will be one of the most important business news stories to follow.

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