Good Monday Morning,

Stocks continuing to improve today on the news that reopening plans are being made. Yes, that is a step in the right direction, but there is no logic for stocks to be improving when there is no evidence on how long it will take companies to recover. As a result, bonds are off slightly this morning. The 10-yr has backed up to .65 and mortgage bonds are -9bps. It is a snoozer of a day so far with limited news, however this will be a busy week with several bond auctions, consumer confidence, GDP, the FOMC meeting, and of course, unemployment. I would expect bonds to improve through the week. Unfortunately, I expect sometime soon there will be a recognition companies will not go back to the same profitability they were just 60 days ago. 0 to be invested in equities when that happens.

I have had lots of questions about how the massive debt the Treasury is creating will impact the economy. My thoughts are that despite the massive increase in government debt, the projection for interest expenses hasn’t changed much. Not too much to worry about yet.

The WSJ tackled this today with the graph below as well with the comment that “That’s because Treasury yields have collapsed. Some suggest that the Fed will now be “forced” to hold rates low for years to come to keep the federal budget from blowing up (a trend similar to Japan).”

Please remain safe and stay healthy.

Make today great!