It appears that equity markets are beginning to worry more about the debt ceiling – at least yesterday they sold off and today is showing softness in the futures markets. Honestly equity markets seem to be very over values based on historical price/earnings so I wouldn’t be surprised to see a sell-off simply because of valuation–a 23 p/e is pretty pricey on a historical basis.
Looks like interest rates are treading water — now at 3.67%–it will be interesting to watch rates in the next few days as the debt ceiling is debated by every talking head.
Today we have little economic news until 1 pm (central) when the FOMC meeting minutes for May are released–while this is old news really markets almost always react one way or the other (or more likely in both directions–spiking up and spiking down). I guess we may see more ‘color’ around future interest rate hikes in the minutes which may or may not be helpful. Right now I am in the no hike camp for June–but with plenty of data yet to come in before the mid-June meeting who knows. We will have the personal consumption expenditures come in for April on Friday and that will weigh heavily on the FOMC decision.
I see once again PacWest Bancorp (PACW) is selling more assets – their Civic Financial real estate lending business. This regional bank seems pretty damned determined to ‘right the ship’–they just sold a $2.7 billion portfolio of real estate loans for $2.4 billion so no doubt their financials for the current quarter will look lousy as they will likely be taking some pretty large write downs.
So let’s get another exciting day going!!!