9/10/09

Yesterday’s markets saw a little improvement in both stocks and bonds. In the bond market, the Treasury’s 10-yr auction went pretty well. Today we have a 30-yr bond auction, and traders are hoping it goes as well as the last two. We did have some news this morning. The U.S. trade deficit widened the most in more than 10 years in July, with imports up almost 5% attributed to our demand for foreign cars, consumer goods and oil. We also saw weekly Jobless Claims drop last week.
Some experts are thinking that we might see a decrease in rates after this coming Tuesday’s Retail Sales Report comes out. The indicator for this was last Tuesdays report on Consumer Credit. Though expected to be down $4.1B consumer credit plunged $21.6B. This was an obvious sign that consumers were not spending. Surprisingly, the market had no reaction to this. Certain economists are thinking that the Retail Sales numbers will fall into line with this report and it will create a move to the safety of bonds which should help mortgage rates. I’ll be in touch.