Unemployment is now at 9.8% nationwide, the worst since 1983. Job losses continue to rise.
The yield on the 10 year bond has dropped to 3.12%, and it appears that mortgage rates could drop to new record lows. According to analysts on CNBC this morning, it is possible that mortgage rates could drop as much as 20 to 30 basis points. Best rates on 30 year fixed rate mortgages prior to this morning were already below 5%.
Has the economic recovery taken a breather? Or has it stalled out altogether? The economy shed yet another 263,000 non- farm payroll jobs in September, much worse than was expected. We have now experienced 21 consecutive months of job losses, with the number of people unemployed reaching 15.1 million. The July and August jobs numbers were revised down as well. Even government jobs numbers were down as states have had to allow employment numbers to drop as well. The average work week is down as it appears that those employers who are hiring are looking for part time employees as opposed to full time.
The reaction on Wall Street is more divestment of equities in favor of the security of Treasury bonds. Stock market futures are pointing to a down opening. DOW futures are down more than 100 points after closing down more than 200 points yesterday. NASDAQ, heavily weighted in technology stocks is taking the hardest hit on the stock market.
Wall Street has been very nervous all week, with investors poising themselves for more bad news. Is this the start of a bigger correction in the stock market? After an almost 50% gain on the S & P and DOW since March, are we now headed for the W shaped recovery that was feared?
Without some good news to turn this market around, it looks like investors are ready to ride out the bad news on the sidelines and wait for something good to move money back into equities.
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