The 10 year treasury closed at 4.84% yesterday and is trading at 4.86% right now–I expect the trading day will see movement in a very narrow range. Tomorrow we get the 3rd quarter gross domestic product (GDP) report–the forecast is for +4.7% which is plenty strong. I pray for a lower number–not dramatically so, just a few 1/10ths below forecast. A number above forecast will kick the 10 year back to 5% and of course we follow the GDP number on Thursday with the personal consumption expenditures (PCE) on Friday–Katy bar the door if that number is hot.
Checking CDs yesterday I see that 5.8% (1 year callable) from JPM is available on both eTrade and Fido – probably from others as well. I still think there are relatively high odds we see 6%–the economic news the next 2 days will go a long way in determining the CD rates.
It is nice to see crude oil (west Texas) trading in the $84 area. Various folks predicting a softening economy is helping to keep traders and speculators tamed – not that these folks (Gross and Ackman) are renowned forecasters, but whatever works is fine with me. Only 1 month ago WTI was trading around $95/barrel–the implications for future inflation when oil sky rockets are ominous–let’s keep things under control.
Well we have little economic news today – just new home sales which is coming at 9 a.m. and this will not be a market mover to any degree – so we await tomorrow and Friday for true economic moving data.
10YR ~ headed up today, now 4.955%
Oil market still fairly calm pretty much discounting the potential for disruption of oil and gas flow out of the Middle East. I disagree as things are getting closer to spinning wildly out of control across the region from the Gulf to the Mediterranean. Keep in mind that Russian forces are already there in Syria while the US getting drawn deeper into another far away war.
I was thinking major oil companies might benefit from a spike in oil prices but they too will be hit as they own oil fields in the Gulf.
Domestic oil companies might be a good alternative, any suggestions?