Market commentary

The 10-year Treasury burst through 3.50% yesterday and traded as high at 3.55%. It rallied back briefly this morning, but is now trading at 3.54%.

Economic data this morning included housing starts for November which increased to 555k, but remained below the 2010 average of 592k, and reflecting a housing market that remains in the doldrums. Initial jobless claims for last week fell 3,000 coming in at 420,000 for the week ending December 11th. Initial jobless claims are improving in the sense they having dropped from their obscenely discouraging levels but not enough to signal a real decline in the unemployment rate.

And finally, the Federal Reserve Bank of Philadelphia’s general economic index rose to 24.3 from 22.5 last month, signaling growth in the manufacturing sector of the U.S. economy.

If you are looking for good news this morning regarding interest rates it is this; so far today interest rates are flat from Wednesday’s market close. However, we have seen this many times in the past two weeks, and then the bottom falls out intraday and rates move higher.