Daily Commentary by Larry Baer: The coming week's economic calendar is extremely
light, highlighted almost exclusively by Thursday's weekly jobless claims
report. Getting a clean read on the true underlying condition of the
labor market is difficult during the holiday season. Mortgage investors
will likely continue to shrug the initial claims data off for at least another
week. If my assessment proves accurate, this report will not influence the
current trend trajectory of mortgage interest rates in any meaningful way.
Uncle Sam will be in
the credit markets on Tuesday looking to borrow $32 billion in the form of
3-year notes, $21 billion in the form of 10-year notes on Wednesday and $13
billion in the form of 30-year bonds on Thursday.
It is my strong
belief the stock markets are very vulnerable to a fairly sharp downward
correction - probably manifesting itself in the first three days of this
week. If my assessment is accurate, look for capital to begin fleeing the
stock markets for the relative safe haven of Treasury debt obligations and
agency-eligible mortgage-backed securities - a condition that will likely prove
to be supportive for steady to perhaps lower rates and higher prices.
THE
MARKET IS ALWAYS RIGHT! . YOU AND I ARE SOME OF THE TIME
