In addition to inflation fears, something else is cropping up.
HOPE>
Remember when GM was taken over by the feds in 2009 when they filed a Chapter 11 Bankruptcy? The feds came in with nearly FIFTY billion dollars to bail them out. Thankfully for GM the business was restructured and the "initial public offering" was made today on the open market allowing investors to express themselves with an overwhelming sense of hope for the future of GM.
This "hope" is tempered with the fact that much of GM's massive debt has been forgiven or covered by your tax dollars which put them in a much better position that they were in. There is also that little fact that they have been deemed "too big to fail" in a way through the government rescue action of 2009.
Here is a great explanation of just what an IPO is if you are interested. <click>
There are many "better than expected" items coming forward like Dell's double the expected profit, the higher than expected consumer confidence numbers of last week and the Philly Fed Index today. The Philly Fed Index is a number that gives us a prediction on upcoming manufacturing numbers. It came in at 22 vs the 5 that was expected. (A zero is a "break even" with that number)
So: Hope that manufacturing is up. Consumer hope is up. Real numbers reported by companies are up. Investors feel like things really are heating up. When that happens they put their money into stocks.
Dow was up 173 points today.
Money goes away from Mortgage backed securities leaving the rates a little higher.
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Chad Schauers
Montana Mortgage Lender, Bozeman, Montana
