Concern Over Interest Rates
Stocks slumped in the afternoon, down 173 points – and this was caused by something new = concern. Concern about the increasing interest rates being shown in the Treasury market. This is a sign that the government requirement to sell new Treasuries is having a very negative affect on interest rates, and this will kill off the recovery stone cold
Bond values plummeted today (interest rates soared 0.20% – a massive move). Even though the 2-year Treasury auction went as expected, it wasn’t viewed positively by the bond market. And, it happened in the environment of the Chinese wanting to pull out of our bond market, and the FED intervening to keep interest rates low. But, the FED is failing in their battle with the markets (as they always do…..). All of this spooked the bond market, and it spilled over into the stock market – I guess someone was watching.
The Dollar rallied one cent today, and oil and gasoline continued their climb upward too.
Gold was sideways today, maintaining its high position above $950/ounce.
In the news today…..
Existing Home Sales – rose 2.9% in April over the sales rate in March to an annualized 4.68 million homes.
Median Sales Price of Existing Homes – was $170,200 compared to $201,300 a year ago.
Inventory of Unsold Homes – rose 9% in April. This is the really bad news, and this means the time it will take to sell of these homes has increased to 10.2 months. This was 9.6 months in March – bad news.
Here are the last numbers for today:
Dow Jones 30 Industrial – 8300 (down 173 points)
10 Year Treasury Bond – 3.70% (up 0.20%) – a massive jump in interest rates
Euro – $1.3888
Gold – $955 (no change)
Oil – $63.45 (up $1.00)
Gasoline $1.89 (up $0.04)