March 29 2006 II
at 2006-04-04 01:40:34
Two Charts
First we have a chart of the yield on the 10 year T-note and the Fed's favorite inflation measure, the PCE deflator-released quarterly with the GDP report. You can see that directionally they track one another very closely-
The next chart is yet another attempt to get a handle on where "real rates" are versus where they have been in the not too distant past- the yield on the 10 year note minus the yoy change in the PCE deflator. Once again the take-away is that real rates are still very low-
April 1 2006
at 2006-04-04 01:40:34
New Fed chief Bernanke has long been an advocate of increased transparency in Fed policy. So it was a bit ironic that the market seemed caught off guard by Tuesday's statement accompanying the rate hike. I wondered if there might be some follow up clarification by Fed members to assuage the markets, and that may have happened on Friday when Kansas City Fed president Thomas Hoenig said that he sees the Fed funds rate in the range of "upper neutrality". Fed funds futures however, are now pricing in the possibility of 2 more rate hikes, not one. The upcoming week will no doubt influence expectations as we get both the ISM reports and the March employment report. The main risk to the stock market right now would seem to be an accident in the bond market.
A
Quote of the Day
at 2006-04-04 01:40:34
"I have never been in a situation where having money made it worse." ~ Clinton Jones
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Early Weakness
at 2006-04-04 01:40:34
Morning News of Note:
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AAPL: JOBS FIGHTING FRENCH OVER ITUNES LAW Apple's Steve Jobs is threatening to halt the successful iTunes music service in France rather than give in to lawmakers there who want Apple to share its technology with other tech companies, The Post has learned. Sources say Jobs has been telling music industry executives that he may bail on France if the country passes a law requiring Apple to let users of digital music players other than iPods download music from iTunes. (Full Story) NY Post
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Amex IPO: Amex to Become For-Profit Firm, May Hold IPO The member-owned American Stock Exchange plans to turn itself into a for-profit company by 2007 in preparation for possibly offering stock in itself. The century-old exchange -- once known as the Curb for its
Google (GOOG)
at 2006-04-04 01:40:34
Standard and Poor's just announced that Google (GOOG) will be added to the S&P 500 Index as of the close on Friday, March 31st. This is big news, and has the stock +$25 in after hours trading. This is because the index managers need to buy shares of GOOG to rebalance their funds.
I don't know how many shares of GOOG these index managers need to add in total, but I think it should be enough to keep a strong bid under the stock into quarter end.
long GOOG
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