(Good)Market spasms!

I made a call yesterday that we should expect to see quite a lot of volatility...keep expecting to lose some more hair! Today we are seeing the stock lever in effect. Stocks are down, while interest rate prices are up(remember price and yield are inversely related, so as the prices go up, rates go down). It appears as if there is more flight to safety...in this case everyone is rushing to buy U.S. denominated assets.


Why one may ask? It may have to do with the fact that the Euro has hit its 1yr low...Greece and the rest of the PIIGS (Portugal, Italy, Ireland, Greece, and Spain) are certainly weighing heavy on investors decision to pull monies out of the equity markets and buy U.S. Treasury's. We have also broken a unwritten line of resistance in the S&P of 1200.. Moving forward, stocks will need the labor market to improve in order to extend a rally.


What does this all mean? Market rates are favorable! With the problems overseas we have seen money pumped into U.S. treasury's which has dragged yields down. Mortgage rates have been benefited as a result. We have settled into a nice range over the past weeks time. Barring any "out of expectation" results from the economic news on tap this week(non-farms payroll is Friday and is the biggie!) or any major political or economic headline (think Greece or Goldman Sachs), we should enjoy a nice couple days of very competitive rates. The next release is today, 10am est...Pending Home Sales and Factory Order. Stay tuned