Tuesday, June 24, 2008
As what is becoming the norm with the market and rates, bonds came off their high of the day and dropped into negative territory before bouncing back to being up 25 Bp for the day. Making the market move erratically today is a mixture of housing numbers, consumer confidence, and deciphering what the Fed said. The Standard & Poor's/Case-Shiller home price index fell 15.3% in April (yes it is June), the fastest rate since it started being tracked. Not to be beaten by bad news, consumer confidence fell to a 15 year low of 50.4, smashing estimates of 57%. Had I not been in college then with a bad hairdo, I may have remembered it. Finally on to Big Ben Bernanke, who with all the wisdom of a government official, stated that we are on the brink of a recession. With inflation on the rise, and the economy still in turmoil, the question isn't if they are going to have to raise rates but when. Let's face it, whatever they do today won't really reflect for at least 6 months. Although we are at risk of Stagflation, rushing into another rate change will just leave us in mass confusion. We bounced off support today, and are still holding in a lock pattern.
Karl Menzer
435-849-0212
