The
markets reopened for business today, after one of the worst storms in history
devastated the east coast by way of strong winds, heavy rains, power outages, flooding
and snow. The storm caused the New York Stock Exchange (NYSE) to close for two
consecutive days for the first time since 1888 due to weather, leaving
Manhattan underwater, and seven million people without power across seven
states. “Frankenstorm” Sandy shut down businesses indefinitely in one of
the nation’s most populated and productive regions, creating concern that U.S.
economic growth in the fourth quarter may be stumped.
The
Bond Market, including mortgage-backed securities, closed at 9 a.m. on Monday
and remained closed on Tuesday. As a result, a majority of investors
closed their commitment desks and those who remained open priced very
defensively.
In
terms of U.S. economic news, early reports this morning show that U.S. mortgage applications declined 4.8% in the week ending October 26th, as
interest rates climbed. Refinance activity fell 6% while purchase applications
increased 0.5%. This morning’s remaining U.S. economic data includes 3Q
Employment Cost Index, October Milwaukee Purchasers Manufacturing Index and
October Chicago Purchasing Manager report. This week, market participants will
focus on Friday’s jobs report that could affect the close U.S. presidential
elections. After some initial concerns after the storm, the Labor
Department says the payrolls report will be released as scheduled.
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