Monday Morning Musings
The market is getting a strong boost in early trading on the heels of no negative financial headlines over the weekend, and some positive developments on the housing front this morning.
JPM said it may raise its offer for Bear Stearns (BSC) from $2 to $10. BSC is trading up over 100% on the news, and has been as high as $13.
The Federal Housing Finance Board raised the home loan bank limit, which should help boost the housing market and provide liquidity to the ailing mortgage sector. Also, existing home sales came in better than expected this morning, and prices actually rose for the first time in 7 months. All of this has the housing index trading +5.2% higher so far.
You know how I always say that I don't like strong market opens. Given that I felt we bottomed last week, I am hoping that this early strength holds. But I would prefer it to settle down for a while and rally towards the close. Right now, the Dow is already up +215 points.
Asian was mostly higher overnight, on the heels of a positive election in Taiwan. And the Yen is nicely lower, which helps. Oil is down a little, near $101. And the 10-year yield is up 16 basis points to 3.49%.
Gold is also higher, after a huge drop last week. The CRB Commodity Index fell -8.3% last week, which was its largest weekly decline in its 52 year history. Wow. That tells me that there is likely more downside to come in the commodity complex, after a requisite bounce.