THE BASIS POINT

Fundamentals 10/5: ADP Jobs, Mortgage Apps, ISM Services

Jobs
ADP private sector jobs for September were +91,000. The market moves with the BLS report two days from now. Last month ADP was at +91,000 and BLS was at +0. Go figure.
ADP Jobs

Challenger Announced Job Cuts
The number is an eye-popping 115,730. Up from 51,114. The two biggest employers laying folks off are the U.S. Army and Bank of America. I am sure that some politician will connect these two and suggest that we deploy those troops to Wall Street to quell that unrest.
Job Cuts

MBA Mortgage Applications
-Purchase Index – Week/Week -0.8 %
-Refinance Index – Week/Week -5.2 %
-Composite Index – Week/Week -4.3 %
-Many refinance borrowers are deleveraging by moving to 15-year terms with the maturity making up 27 percent of the week’s refinancing volume for the highest share on record. I have also seen people paying down mortgages to $417,000 to get better rates. There is a macroeconomic effect of the moves to shorter durations and pay-downs. The most obvious is that the pay-down borrowers have less cash and the 15 year borrowers have less money available for discretionary spending.

ISM Service Sector
– Composite Index – 53.0
– Previous was 53.3.

Weak sauce.