Monday, December 6, 2010

Monday Market UpDate

Monday’s bond market has opened in positive territory following a flat open in stocks and a primetime TV reminder from Fed Chairman Bernanke that the economic outlook isn’t so rosy. The stock markets are nearly unchanged from Friday’s close with the Dow down 3 points and the Nasdaq down 1 point, but just the lack of a gain is good news for the bond market at this point. The bond market is currently up 15/32, which should improve this morning’s mortgage rates by approximately .125 - .250 of a discount over Friday’s morning pricing.

There is no relevant economic news being posted today. Fed Chairman Bernanke’s interview on last night’s edition of 60 Minutes has helped push bonds more towards reality. During his interview that aired last night, he said that unemployment would likely remain high for 4 or 5 years and that recent concerns about inflation are overstated. He also added that another round of debt purchases by the Fed is possible. I find the timing of this interview to be impeccable and quite ironic after last week’s activity. It, along with Friday’s employment data, will hopefully help restore some reason to the markets and remind us that the economy still has plenty to overcome.
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