Wednesday, June 18, 2008
We are having a modest rally on the bond today. Currently we are up 64 Bp for the day, and 40 Bp since pricing came out at 10 am, giving us 2 re-prices for the better. The main driving force today is more on worries from the earnings reports and the effect they are having on the DOW, causing investors to move to the safety of the bond. Today both Morgan Stanley and Fifth Third Bancorp came out with much lower than expected earnings, with Morgan Stanley reporting that profits fell more than 57% from a year ago. This in turn caused a cascade effect on other financial institutions stocks helping push the bond up even more. We have finally broken above the level of resistance, which should allow for some short term rate improvement. Although I would keep a keen eye on the DOW for any major improvement, today is a good day to float in hopes for better rates tomorrow. As always, if anythging changes, I will let you know.
