For a Monday, the stock market barely woke up. Normally, Monday seems to be the strong day of the weak…excuse me…week. Looking at the two days together, Friday and Monday, the move since mid-day Friday looks like a flat line. There was little attempt on Monday to correct the big outside down day the market had on Friday.
Other markets have been moving, pretty much all commodities have gone up with oil trying to recover its old highs just over $70, closing on Monday near $69. Precious metals have been involved in this move with spot gold virtually at $600 an ounce and silver right around $12.50. We can remember a time not too long ago when these precious metals numbers were 30% less than they are now.
Bond prices have decided to go the other way and they have dropped about 5% over the past couple of weeks, Treasury bonds in particular. With bonds dropping in price, yields have been rising pushing mortgage rates up in the process. The media has started to pick this up a little, talking about how 25% of the mortgages are ARM types and will be resetting to new, higher rates over the next two years. Special types of mortgages, like neg-am, negative amortization, and io, interest only, will probably get hit the hardest, with some of these monthly payments going up 50%. This will not be a pleasant time for anyone holding these mortgages.
With the market basically flat Monday, it leaves us precious little to say, except that we didn’t get to see much of a bounce, and this on a Monday.
Be careful out there…
Dow Industrials: 11,141.33 +21.29
RYVNX: 17.99
RYAIX: 21.65
TLT: 85.26
BEGBX: 12.86
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