Larry Baer's Market Viewpoint for the week of 5.9.2011

The Fed still has roughly $75 billion to spend of its original $600 billion “QE2” funding allotment -- and they will likely use some of that cash to “crease-the-wheels” at this week’s three-part Treasury auction. Thursday’s April Retail Sales figures and Friday’s Consumer Price Index will be closely examined by mortgage investors. In the unlikely event we see a gain of more than 0.6% for the ex. auto component of the Retail Sales report and/or a reading of 0.3% or higher for the core rate of the Consumer Price Index -- expect the four-week rally favoring lower mortgage interest rates to come to a shuddering halt.