Tuesday, November 18, 2008

Rate Watch 11/18/08: Carefully Floating

Bond Prices are continuing to trade at the 200 day moving average for the 10th trading session. I am watching for a break above or below this level and will let you know when this happens. A move upward would signal lower mortgage rates, but if we drop convincingly below this level, we could see a wild sell off as we have experienced many times this year.

For now, Stocks are reacting favorably to the Hewlett Packard announcement that they are beating income projections for the 4th quarter and for the year. Finally, some good news from a big name company!

Overall inflation on the Wholesale level was released and the decrease was the largest since records started to be kept in 1947 (this was helped by the 25% decline in oil prices). This is good news for Bonds, which hates inflation. I will keep you posted as to the movement in the markets!

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