The equity markets think highly of a higher revision in the gross domestic product with the S&P500 up about .4% right now, with interest rates spiking higher with the 10 year treasury up at 3.86%—up 15 basis points.
It is not just the increase in the read on GDP for the 1st quarter driving pricing–but the much lower than expected unemployment claims number pitching in on the party.
If one was to make a call on the FOMC meeting in July right now one would have to say increase 1/4%—BUT since we have plenty of data yet to see related to inflation before the late July meeting and are data dependent one never knows. Fed officials already have set the table for at least 1 increase of 1/4% and they won’t miss the opportunity.
Todays news is sending banking and insurance preferreds lower by about 1%–it is obvious that we have plenty of time to buy ‘bargains’–but what is a bargain? I don’t know if have seen the bottom in these issues – my bank holdings have not hurt me, but I have some fear of the Fed insisting on a recession–certainly I won’t be buying any more bankers until we have more ‘data’.