Market commentary

Orders for durable goods (products designed to last more than 3 years) in February fell 0.9% as transportation and defense orders were weaker than expected. Expectations were for durable goods orders to rise 1.2% for the month. Ex-transportation, durable goods

And the sovereign debt problems in Europe will not go away as Portugal has now moved one step closer to needing a bailout when the Portuguese parliament rejected the Prime Minister’s proposed austerity measures, aka, tax hikes and spending cuts.

Dallas Fed Bank President Richard Fisher reiterated his feeling yesterday that QE2 will end in June and no more stimulus would be enacted. Bloomberg quotes Fisher as saying that since QE2 was implemented, he has seen "extraordinary speculative activity" and "there is an enormous amount of liquidity sloshing around." Recall that two weeks ago Bill Gross of PIMCO reported PIMCO had sold most of its U.S. government bonds, and after the earthquake, Japan will be using its resources for rebuilding. The question remains, when the Fed, PIMCO and Japan stop buying U.S. debt who will, and at what interest rate?

The markets’ reaction to this news and data leaves me in a quandary. U.S. stock markets are moving higher while bond prices move lower---meaning higher interest rates. Given the poor economic data, sovereign debt uncertainty and the continued unrest in the Middle East one would expect just the opposite.

Mortgage prices as worse by approximately .125% from Wednesday’s close.