A lot of selling came in around 9 o'clock because Freddie Mac priced a large 10-year note, their benchmark security. Right at the pricing of that note, the Treasury market went down and it wasn't able to recover. |
All eyes will be on the jobs report. The Fed is still worried with inflationary pressures, and may very well not be done with rates. But as long as the economy keeps growing without a substantial pickup in inflation, we may see bonds falling and stocks rising. |
As far as energy prices and core consumer prices, so far it is all smoke and no fire. Rising energy costs have not yet fed into the costs of other goods, despite many anecdotal signs that prices are being impacted. |
Business capital spending is coming on strong and the timing of these equipment purchases could not be better. Business spending will take up the slack as the housing slowdown cools consumers' appetites. |
Buyers may be eager to lock in rates now as mortgage rates are expected to trend higher. Many homes go on the market in the first days of spring, and this is the first real evidence that buyers are taking a fresh look at the market. |
Cars seem to be pivotal in keeping the wheels of consumer spending turning and certainly this quarter is starting out with a thud. |
consumer spending has not been dented by the hurricane-inspired rise in gasoline prices and fears of higher home heating oil bills. |
Consumers are more optimistic during this holiday season, and retailers hope this means that they will hear the ringing of cash registers in what has been a lackluster sales period so far. This augurs well for a continued expansion of the economy next year. |
Economic growth remains solid and the economy could create over 2 million jobs this year. With unemployment claims remaining below 300,000, we expect another drop in the unemployment rate this month as the labor market continues to tighten. |
Expectations of Fed action have gone though the roof. The market is looking for two 25-basis-point moves and one 50-basis-point move before the presidential election. |
Growth isn't fast enough that the Fed has to brake the economy, and at the same time it isn't slow enough that the Fed can stop and watch. Inflation pressures can still gain a foothold as the economy continues to take up slack resources. |
Higher energy prices are not providing any big headwinds for the economy and inflation remains very contained, |
Higher energy prices are not providing any big headwinds for the economy and inflation remains very contained. |
I'm really more concerned that the economy is taking up slack resources. That could be a little bit worrisome. I think the Fed continues to raise rates. |
Is the soft-patch bond rally over? It's a tough call, but we don't think so, as the reasons for the soft patch, rising gasoline prices at the pump, are still there. |