Market Snapshot October 9, 2019

white house

Good Morning on this Wednesday Best Day of the Week,

 

Some more weak data today (below) but the bond market isn’t taking the bait as bonds are off 14bps (about half of that is due to it being rollover day). The 10-yr is at 1.57% and there a 10-yr Treasury auction today which is fairly important.

 

  • JOLTS 7.051M vs est of 7.191M
  • Wholesale Inventories 0.2% vs est of 0.4%

 

A good paragraph from Dan Rawitch on things… Bonds are under pressure this morning. The pressure is coming from the technical and not the fundamental aspects of trade. Fundamentally the news is bond friendly and on top of that, the FED clearly stated their intention to begin increasing their balance sheet through the purchase of treasury bonds. This is great news for rates and is a clear signal that the FED plans on easing again this month. Expectations for another FED ease in October are now at 90%. It will be ugly if the FED decides that Bond purchases will be the only medication administered, given the huge expectation for a rate drop this month. Anyway, we are range bound and we have failed too many times at the top of the range and we will likely work our way to the bottom. At this point, I view it as a simple correction. However if the equity markets continue to foolishly rise, bonds could see a more severe correction. Can you believe the DOW is up over 150 today? Why? Well, an “UNKNOWN” source was quoted to say that China is ready to make a deal. C’mon Man!! This is getting old. Who is this unknown source? It’s nobody, that’s who.

 

And.. there was a nice article in the Las Vegas Review Journal yesterday about housing prices finally recovering to pre-recession levels (of course not adjusted for inflation). Here is the link to feel good about the market.

 

Make today great!