Market commentary

Citi, Bank of America, and GE all beat earnings estimates, however, earnings are growing on cost cutting, not on demand for goods and services. Revenue expectations reflect this trend, and the result is a significant decline in U.S. stock prices.

Additional economic data shows inflation is not a threat as the Consumer Price Index fell 0.1% with the core rate rising 0.2%. Bond prices are in rally mode again, causing the yield on the 10 year note to fall to 2.935%.

Thursday afternoon the Senate passed the new financial regulatory bill, which will add over 5000 pages of new regulations to large banks, community banks, non-bank mortgage lenders and many other types of businesses that offer credit. In addition to the new regulations, the bill authorizes a new government agency that will cost billions to operate. We all know where that money will come from; yes, you and I. Between the massive health care reform and now the financial regulatory reform, the markets are sending a clear signal that the only growth in the U.S. will be in government and the U.S. economy and employment will be stagnant for years to come. One only has to look at the bond market and the extremely low yields to obtain confirmation.