Market Commentary for 1/6/11

Rates are a bit worse this morning after mortgage bonds took a beating yesterday given preliminary job data appears to be setting us up for a strong employment report tomorrow.  Yesterday private sector job data came in very strong, followed up today with lower jobless claim numbers.  Some of this appears to be seasonal but the overall strength of the data remains.  Currently bonds are attempting to regain some losses in light trade and stock market indices are negatively largely on energy stocks.  So far the trading session has been choppy as market sets up for tomorrow’s big jobs report and next week’s round of auctions.  The 10-year Treasury yield is hovering around 3.421% significantly higher than when Ben B. and the Federal Reserve announced their dollar busting QE2 scheme…accomplishing the opposite of his stated policy objective of lowering and stabilizing rates….makes one wonder what the real objective is.

In the news today…        For more detail, click on the Market-Headlines attachment

- Fewer Americans Filed Jobless Claims Over Past Month (beware seasonal adjustments and general government B.S.)

- In 2011, Fed Will Be in Watch Mode (watch them purchase a trillion in US Treasury debt)

- Foreclosures May Be Undone by State Ruling on Mortgage Transfer

- Soros Mistrusts EU Aid as Irish Default Risk Soars (Soros mistrusts?  I think we should mistrust his as he is a currency manipulator extraordinaire.)

Reading Suggestion of Today…    The 5000 Year Leap by W. Cleon Skousen   

Market Commentary for 1-3-11

Rates are improved today as mortgage bonds, despite being in negative territory, are better overall from Thursday’s levels when pricing was set.  No apparent reason for this really as we see positive economic indications and the Feds money creation scheme which should push rates up …. keep an eye out.  The market is trading thinly again this morning as Asia is still on holiday.  Bonds are under pressure as strong manufacturing and construction data was released today, continuing to paint a picture of a recovering economy which continues the narrative of a rising rate environment.  The stock markets are continuing to rally with the Dow up over 125-points at the moment. 

In the news today… Click on the Market-Headlines Attachment for More Detail      

- ISM Index of Manufacturing in U.S. Rose to 57 in December

- Construction Spending in U.S. Rose in November for Third Month

- Mishkin Says Economic Strength Makes QE3 ‘Much Less Likely’

- Bank of America Resolves Fannie, Freddie Loan Putback Dispute and Ponies up with $2bill to cover

Reading Suggestion for Today …The Moon Is a Harsh Mistress, Robert A. Heinlein