Tuesday, June 03, 2008
Factory orders Jumped up a whopping 1.1% last month, much higher than the .1% expected, and giving the Dow a good boost in the morning. Banging Ben Bernanke also came out and to no surprise said that the Fed is done with rate cuts and even hinted about rate hikes. This is good news for us as a country as it will help tame inflation and boost the value of the dollar. Since oil is only traded in dollars, this equals to lower prices per barrel. The bond has been down most of the morning, but has recently moved into positive territory, giving us a chance at a re-price for the better today. What seems to have changed the rally is that both Lehman Brothers and Residential Capitol LLC are actively looking for fresh capital to stay afloat. Also helping the boost is GM's announcement that it is looking to close 4 factories and considering selling its Hummer brand. Big SUV's and expensive gas don't mix. The bond is up 15 for the day and 28 since rates came out. It has also finally moved back into the Trend wedge, signaling that we are back in for better rates. I recommend holding out for better rates today. As always, if anything changes I will let you know.