Kicking off the week, Mortgage Bonds continue their sideways hip hop dance along a floor of support and have improved since testing this floor last week. However some good news for Existing Home Sales this morning has put a little pressure on bonds, pulling them down.
Stocks are fairing pretty nicely despite missed earnings reports of Caterpillar and McDonald's. More ugly news as the list of job cuts grows...Home Depot and Caterpillar add 7,000 and 20,000 respectively.
In economic news, first up today is Existing Home Sales - which came in better than expectations. Here's the skinny...sales were down for December 3.5% over the prior December as the median prices feel to $175,400 down 15.3% from a year earlier. It has been said by chief economist that this is likely the largest price decline since the Great Depression in the 1930's. On Thursday we will get a read on New Home Sales.
This week will host the first Fed Meeting of 2009 and the new presidential term. What will they talk about? Even E.F.Hutton will be listening carefully for their take on the economy, stimulus & recovery plan, their Mortgage Bond purchase program and future direction. Will we hear the "D" Deflation word? Or will it be the "I" Inflation word?
Currently the technical signals for bonds are encouraging. When coupled with the Fed's purchase program, it's a good recipe for rates moving lower.
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