Market commentary

This morning we received a number of economic reports. Initial jobless claims last week rose 2,000 to 393,000. Durable goods orders were a mixed bag with November’s better than expected performance being offset by downward revisions to September. Personal income was up slightly while personal spending was softer than expected. The U.S. savings rate continues to steadily decline from its 2010 and 2011 highs, which is contributing to the increase in spending.

Germany received a wake up call today on a failed debt auction in which the German debt agency had to retain almost half of a 6 billion euro offering due to a shortage of bids. While the failed auction pushed 10 year yields in Germany to just slightly over 2%, well below its European brethren, it is a clear sign investors are shying away from Europe. European leaders have strongly opposing views on how to resolve the financial crisis, which for now tells investors there is no resolution.

In the U.S., stock markets are under pressure and broadly lower with yields on Treasuries flat from Tuesday’s close. Mortgage prices are worse by a few basis points.

Market commentary

Stocks were pummeled Monday as investors reacted to the failure of the U.S. deficit reduction panel to reach an agreement and to the growing financial crisis in Europe. The Dow dropped 249 points while the S&P 500 ended the day at 1,182, its lowest close in over six weeks. Treasuries rallied early and managed to hold their gains with the 10-year closing at 1.95%. The turmoil in European debt markets created stellar demand for the U.S. Treasury’s two year note auction, so we will see if that carries over to today’s auction of $35 billion in 5 year notes.

Economic data this morning consists of the first revision to the third quarter GDP, which was revised lower from 2.5% to 2.0%. Later today we will get the FOMC Minutes.

U.S. stock and bond markets are trading flat after digesting Monday’s volatility and will most likely quiet down as folks wind down towards the Thanksgiving Day holiday. Prices on mortgages have improved slightly.

Market commentary

The debt crisis in Europe appears to have no solution and is causing investors to push interest rates for many countries to unsustainable levels. The demand for higher yield will hurt these countries as they attempt to issue new debt or roll over existing debt.

Stocks around the world are down this morning, including in the U.S. The DOW traded lower by over 300 points and is currently hovering near that mark. U.S. Treasury prices have improved; however, even U.S. debt is coming under scrutiny. Investors in U.S. debt are losing confidence in the country’s political system as the U.S. deficit panel failed to reach agreement on reining in the ballooning U.S. debt. The yield on the 10 year note hit a low yield of 1.95% early this morning and is currently at 1.97%. Mortgage prices are slightly improved from Friday.

Market commentary

The bond market improved Thursday and U.S. stocks fell sharply as the “euro fear” trade that we have seen for several weeks once again came to the fore. The yield on the 10 year Treasury yield fell to 1.93% intraday but is back up to 2.02% this morning. There were reports yesterday that the European Financial Stability Fund may not backstop Italy, in addition to growing concern about the liquidity in European markets.

Economic data in the U.S. economic data has looked incrementally better this week, including today’s report. The index of U.S. leading indicators rose .09% in October, more than forecast, after posting an increase of 0.1% in September. The Leading Indicators Index (LEI) is an outlook on the U.S. economy for the next 3 to 6 months. Nine of the ten components contributed to October’s increase, led by the increase in building permits, the drop in initial jobless claims and a longer factory workweek.

Partially ignoring the financial and fiscal drama in Europe, U.S. stock markets are trading higher this morning as Treasury prices decline. Prices on mortgages are slightly worse.

Market commentary

Producer prices eased month over month 0.3%, driven by lower oil prices, and excluding food and energy, prices were flat month over month. Retail sales for October rose 0.5%, beating estimates of a 0.3% increase. Excluding auto sales, retail sales rose 0.6%. Sales of electronic goods were up 3.7%.

Over all this morning’s reports were positive for the U.S. economy. However, Europe remains the focus of the global markets and resolution of the financial woes in those economies is far down the road. U.S. Treasuries have improved slightly with the yield on the 10 year note at 2.02%.

Market commentary

Excluding today, this week’s calendar is full of economic data. Tuesday we will get an inflation reading from the Producer Price Index and a status on the consumer in the form of Retail Sales data. Late in the week we will have the Consumer Price Index, Industrial Production, Housing Starts and Leading Indicators.

All of this data’s effect on the U.S. markets is nil as the focus continues to be on Europe and the financial crisis that appears to be spreading relatively unchecked. EU policy makers seem unwilling to make the tough decisions; however, the longer they wait the more likely it is the markets will make the decisions for them.

For today, U.S. stock markets are trading slightly lower with Treasury prices flat from the close last Thursday. Mortgage prices are worse by approximately .125%.

Market commentary

The yield on the 10 year note fell to as low as 1.93% Wednesday as the turmoil in Europe drove investors out of risk assets and into the perceived safety of U.S. Treasuries. However, given the over borrowing of and spending of governments around the globe, even the flight to safety into U.S. Treasuries did not help yesterday’s 10 year note auction which had a weak bid to cover ratio. This does not bode well for today’s auction of $16 billion of 30 year bonds.

In this morning’s economic data, initial jobless claims dropped from 400,000 to 390,000 for the week ending November 5. Import prices in October fell more-than-expected, dropping 0.6% with energy and food prices leading the declines.

U.S. stock markets are rebounding this morning after Wednesday’s thrashing and bonds are trading lower. The yield on the 10 year note is back to 2.05% and mortgage prices are worse by .25%.