Bond Bubble
Stocks claimed some sanity today, and fell 245 points in the face of the bad economic conditions. Is this the beginning of the next meltdown of stocks?
Bonds went sideways, and many are saying that there is a “Bond Bubble” happening right now. I tend to agree, but it could last longer and go deeper (in interest rates) than anyone thinks – as all bubbles do. Another thing pointing to unusual movement on the bond market is its apparent “breaking” from moving in sympathy with the stock market – I’ve been noticing this over the past few months, and see a new pattern for bonds emerging – one that is driven by government bond actions.
Gold fell significantly, and is now a “buy”, as it is below $850/ounce. The Dollar went sideways today.
Oil and gasoline fell today as worries about a “wild card” event in the oil markets is lessening, and supplies/storage appear high compared to demand. This fortunately has lessened the chances of a gasoline price increase – at least a significant one.
In the news today…..
Unemployment increases to be announced tomorrow moved the market downward today. ADP (a payroll company with excellent data on employment – better than the US Government’s data) is showing a major increase to be announced tomorrow. Today’s market has discounted that announcement – so that news by itself shouldn’t be a big deal tomorrow.
Consumer loan repayments are at their POOREST since 1980, and are expected to get worse. This trend will only get worse by the increase in unemployment expected.
Commercial rents are down 1.2% last month – the largest decrease since 2003. I think this trend will only get worse.
Here are Today’s numbers:
Dow Jones 30 Industrial – 8770 (down 245 points)
10 Year Treasury Bond – 2.49% (down 0.01%)
Euro – $1.3634
Gold – $842 (down $24) – now gold is a buy.
Oil – $42.63 (down $5.95)
Gasoline – $1.08 (down $0.11)
