Monday, September 25, 2006

Monday Morning Musings

The market opened on a positive note, but has since faded in the first hour of trading, as selling pressure exerts itself. Financials are still mostly higher, which is positive for the overall market. Most other sectors are mixed, save energy which continues to decline sharply.

The bond market continues to signal worry over economic growth, with the 10-year yield plunging further to 4.55% this morning. This further exacerbates the inverted yield curve, which has now exhibited a negative slope for 9 of the last 10 weeks.

I am still in the rough soft-landing camp, but I think the bond market is saying that the Fed will need to cut rates sooner than many think possible. Stay tuned.

This is the last week of the 3Q, so there may be a bid under the market as we head into quater-end. Of course, that means fund managers will want to dress up their portfolios with more of what has been working (tech, financials) and unload what hasn't been working (energy).

This is also a week that could see some earnings preannouncements, if there are going to be any. But so far it has been pretty benign.

I'll be right back with a news roundup--


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