The week ahead is shaping up to be a barn burner. Month end, Quarter end, and the Employment Report for September are just a few of the events that could rock our world.
- No news today but tomorrow will get the ball rolling with Case Shiller Home Prices and Consumer Confidence.
- Wednesday’s focus will be on the ADP employment report, posting estimates for Friday’s jobs data.
- On Thursday, Construction Spending and ISM Manufacturing will take center stage, only to give way to the all important Employment Report due out Friday at 7:30 am cst.
- We expect a volatile week in bonds, stocks, and Austin mortgage pricing.
Stocks are having a good morning, up 125 points on the continued momentum trade that has carried the market for weeks. Technical trading is in charge here as the fundaments just don’t stack up. S&P’s at 1100 (currently 1060) should put a cap on it. The 30 year bond has been on a terror lately as well. Incredible curve flattening as real money traders are buying duration, both for yield and for month end extension needs. 30 year bonds are currently up 23/32’s (yield 4.05%) while the 10 year note is only up 7/32’s (yield 3.30%). Despite improvement in stocks, the long end of the curve (10’s through 30’s) continues to hold their gains. The next target is 3.26% on the 10 year note (currently at 3.30%). We will need a sustained break below that yield mark to confirm any further upside (rally). Given the week ahead (Employment Report) odds are good that this level holds.
