Market Update

Market Update + By the Numbers - Monday, April 14, 2008 10:34am ET

Current Trend Direction: Sideways

Risks favor: Carefully Floating

Current Price of FNMA 5.5% Bond: $101.00, -6bp 

Prices have gone from up to down to near unchanged and then down a bit as of now.  Some poor earnings numbers from Wachovia got bonds moving up before the market opened, but then a slightly better than expected Retail sales number turned things around.  

The volatile Retail Sales for March showed a 0.2% reading, higher than the 0.1% expected, but still not that great.  Additionally, February's prior reading of -0.6% was revised to a slightly better -0.4%.  When excluding the effect of vehicle sales, Retail Sales increased by 0.1%, just below expectations of 0.2%.

Wachovia, the fourth largest US bank, reported a loss of $393 million related to investments in sub-prime mortgages.  The bank also announced it is cutting its dividend by 41% and is selling stock to a private investment group to raise $7 Billion in capital.  This bad news weighed on stocks in the early going.

Federal Reserve Governor and voting FOMC member Kevin "Car" Warsh is scheduled at 3:15pm ET, with a question and answer session to follow.  With the market so jittery, stay tuned during this time, as there is always the potential for some more volatile price movement..

The floor of support at the 25-day Moving Average has moved higher and is now about 38bp beneath present levels.  For now we will carefully float.

 

Market update provided courtesy of our investors