Credit Rating Effect
Stocks moved absolutely sideways with no change on the day. The market is waiting for the results of the FED meeting over the next 2 days. The bond market moved sideways too.
The dollar got a little stronger, and then gave up half of its gain.
Oil went higher along with gasoline. All the talk in Saudi Arabia this past weekend was a waste of time as far as the oil futures market was concerned.
In the news today…..
The FED meets tomorrow and Wednesday. The bets in the bond market is that there will be “no change” in the Fed Funds rate announced at this meeting. In addition, the bets continue that the August FED will continue to have no change in interest rates, but the September meeting could have an INCREASE in interest rates. I would discount whatever the market is saying out in September as a LOT of things are going to happen between now and then.
Do you remember the news where the credit rating companies (like AMBAC and MBIA) were having their credit ratings reduced? Their ratings were reduced from AAA to AA. Here is what this means. All the paper issued, and guaranteed by these companies, will have their ratings reduced from AAA to AA. All the institutions that hold this paper will have to re-value these notes, and a further decline in the financial sector could result as write-offs would result. It’s interesting to understand what something like a downgrade can have on the economy.
Here are today’s numbers:
Dow Jones 30 Industrial - 11,842 (no change)
10 Year Treasury Bond - 4.17% (up 0.03%)
Euro - $1.5519
Gold - $887 (down $17)
Oil - $136.40 (up $1.04)
Gasoline - $3.48 (up $0.04)
