9/3/09

Yesterday’s market was more of the same: stocks feeling a little heavy, relatively weak economic information, and some nervousness about the job’s data tomorrow ahead of a 3-day weekend. Factory Orders came out less than expected. The big news, if there was any, was release of the FOMC Minutes from the August 12th meeting. Surprises were kept to a minimum. The FOMC discussed trimming the mortgage backed security and Fannie/Freddie purchase program, see the economy slowly recovering during the 2nd half of 2009, households continuing to face tight credit but that consumer spending was stabilizing. With little inflation on the horizon, they see the risk of substantial disinflation. Not only that, but several members see a sizable risk of bank credit losses. Just what we need, huh?
So far this morning yesterday’s bond market improvements have gone away, primarily attributed to a rally in the Asian equity markets. There is talk of the Chinese government taking steps to support their markets. Their Central Bank did vote to leave their rates unchanged last night. The only news out today is that Jobless Claims are down, but there was no noticeable reaction to the report. We will also have the Treasury’s announcement for the 3, 10, and 30-yr auction next week. As I mentioned, rates are slightly worse this morning.