On Tap this week (july 6-10)

Dow start = 8280

MONDAY = ISM non-manufacturing index at 10am (the expectation was for a reading of 46.7, compared to 44 previously). The report came in-line with expectations roughly and a reading of 47. New orders jumped more than 4 pts to a reading of 48.6. However, draws or reductions on inventory took that reading from 47 to 45, showing that non-manufacturing companies are keeping inventories low and skeptical of the green shoots. Again, and say it with me, it was a "positive" report that showed stabilization perhaps but not growth and was still a reading in the contractionary side of the index affirming the absence of economic growth.

WEDNESDAY = 10 yr note auction at 1pm; Prior concerns over whether the US would be able to find financiers to fund its longer-term debt have definitely subsided as the stock market has fallen back and begun its correction. Thus, treasuries are a safe haven for investors, meaning that we have financiers for that 787+ billion and we have declining rates as well on the treasuries (and thus mortgage rates). Good news despite the falling market prices. The 10 yr auction was very very strong with a bid-to-cover ration of 3.28.

Consumer credit at 3pm; After massive credit tightening over the past 3 months (last month consumer credit was decreased by -15.7 billion), June saw a slight tightening of only -3.2 billion. Don't consider this a strong positive. Banks are still seeing credit card defaults increase and outstanding credit card debt by consumers has hit an all-time high. Plus, -3.2 billion is still a big number. So don't take this to mean that consumers have access to leverage again. It's more of a non-starter really.

THURSDAY = Initial jobless claims at 8:30am; Initial jobless claims are a bit confusing this week as the number came in well below our -600,000 marker that the economy has been tracing. It came in at -565,000. However, this dip could be the result of changes in the timing of auto industry layoffs. Thus, it may not actually be representative of a slowing of layoffs quite yet. More importantly, "continuing unemployement" claims hit a new high - indicating that the number of unemployed AND UNABLE TO FIND A JOB TO GET OFF UNEMPLOYMENT continues to swell.

30 yr bond auction at 1pm; This auction was mixed but still had solid support from debt financiers with a bid-to-cover ratio of 2.38 (2 is fair). While a far cry from the 10 year auction that had a ratio of 3.28, this was adequate. The question is not IF but WHEN the support will wane. Likely as the dollar continues to receive skepticism or if the market revives. There are ALOT of auctions to come, given the many billions needed to be raised by the government. So this was a good sign, but a drop in the bucket of sorts. Can we keep the demand despite the over-supply will be the continual question.

FRIDAY = Consumer Sentiment at 9:55am; It's my least favorite report - because its a report based on optimism and in current market conditions, its causing way too strong of market swings that aren't based on reality. Nonetheless, positive consumer sentiment reports have helped upswings and may not help corrective retracements. The report came in low this month at 64.6 after a strong reading of 70.8 last month. Expectations were actually for an improvement to 71.5. This down consumer may reflect the tough times people are in and that consumerism wont save GDP or the economy anytime soon. Consumer expectations for the next 6 mths came in at a reading of 60.9.