7/22/09

Nothing left today on the data board. Earnings reports continue to dribble out for Q2; Morgan Stanley's data this morning was worse than expected. At 10:00 Ben Bernanke returned to Congress for the second day of his semi-annual required testimony on monetary policy and the economy, at the Senate. Yesterday Gentle Ben outlined the Fed;s plans to cut off inflation at the knees when the economy actually starts to grow. Markets wanted to hear how the Fed plans to retreat from all of the stimulus it has affected in the quantative easing over the last two years. Bernanke's plans were welcomed and interest rates declined in a strong move. He also said the Fed sees little economic recovery for at least a year and that the Fed had no intentions of any tightening for quite awhile.

Today Bernanke at the Senate will likely get more definitive and interesting questions from Senators; not the constant posturing we see at House appearances. Senators don't have to run for office everyday like House members and usually dig a little deeper into issues. The House most times spends more time posturing than with substance. That said, most of it today is likely to be a re-hash of yesterday. With nothing else on the calendar most market focus will be on Bernanke today.

Rates have been improving and in best case scenarios are back at 5% with 1 point. This is great news. Let me know if you have any questions.