Okay...so I can admit when I am wrong. The fear factor caused by the "Swine flu" didn't seem to have any teeth today. (I predicted we may get a few days or even a few weeks of effect from it.)
Investors sold off bonds as the CONSUMER CONFIDENCE index came in TEN POINTS higher than expected. This is HUGE. Remember that there is SO MUCH sitting on the sidelines right now and when people feel confident to start making some moves...we need to watch out.
I saw an interesting analogy on this. Imagine if everyone parked their cars in a parking garage because of poor weather or other reasons. (Think MONEY parked in a mattress.) THEN: when we start getting NICE weather...everyone needed to get their cars out of the garage at once. A MASSIVE traffic jam would occur making the "exits" a REALLY desirable or VALUABLE commodity. (Think MONEY now chasing a limited number of goods and services...those goods and services become more valuable with the demand. When things cost more...we call it inflation.)
FNMA 4% was down 22 bps and closed at 100.31 vs 100.53 at yesterday's bell.
The Case Shiller Home Price Index reported an 18.63% drop in home prices for February vs a year ago...which DID NOT set a new record for the first time in 25 straight months....read that twice. YOW. Does this really mean things are getting better?
$35 billion in treasury bonds were auctioned off...but MORE SIGNIFICANT: a higher YIELD was offered to attract buyers. THIS is where things could get dicey. If the feds need to offer higher yields over time: mortgages that are indexed or adjusted based on t-notes will see some higher rates. IT is a GREAT time to get out of Adjustable Rate Mortgages as the future could be interesting for them even though current adjusted rates are good.
Dow lost just 8 points...
Have a great eve,
