Institute for Supply Management Manufacturing Index

ISM Index | Reported 48.6 | Est 48.2 | Prior 48.3 | ELEVATED

The Institute for Supply Management [ISM] Index for the manufacturing sector came in better than expectations.  A reading lower than 50 still signals further shrinking in the economy, but investors like “not that bad” news and stocks have benefited.  UBS has managed to write down $19,000,000,000 and investors think it’s a sign of the credit crunch coming to an end… I wouldn’t be quick to jump on that band wagon, but let’s hope.  Mortgage Backed Securities are off -28bp on the day.  It is important to understand that mortgage rates do not correlate with the 10-Year Treasury; it is currently -103bp on the day.  30 Fixed are about 5.875% today.