Market commentary

This morning’s report that Initial jobless claims rose from 371k to 397k for the week ending March 5, and the four-week moving average rose slightly to 392k had no effect on the markets. What did have an effect was Moody’s downgrade of Spain’s sovereign debt, and weaker than expected economic data from China. Couple these items with the continued unrest in Libya and the Middle East and you have a scenario where the markets have a variety of crises on which to focus.

Since the downgrade of Spanish debt and weaker than expected growth from Chine are the new kids on the block for today, this has become the focus. U.S. stock markets are in sell mode with the DOW lower by 180 points. Any potential flight to quality rally in U.S. Treasuries is muted with the yield on the 10 year note lower by a couple of basis points.

The good news is oil and energy prices are falling sharply on the perception that global economic growth is slowing.

We saw a nice rally in bonds on Wednesday on surprising demand at the 10 year note auction. We will see if this can be repeated today as the Treasury auctions $13 billion of 30 year bonds.