Market Analysis

Bonds are flat today despite the 2nd Estimate of 4th Qtr GDP being revised down to 2.8% growth.  Analysts had been expecting GDP growth to be revised up to 3.3%.  Bonds and stocks are still reacting to the Middle East situation.  Stocks are up today as investors are becoming less concerned about a major oil supply interruption.  Investors are currently taking Saudi Arabia at their word that they will step up production.  Also, despite ingredients for youth discontent in Saudi Arabia (according to a Washington Post article today 60% of the population is under 18 and 28% of working age youth are unemployed), investors are betting that the Saudi regime will successfully navigate this period of turmoil. 

In separate economic news, the University of Michigan final February Consumer Sentiment index came in beter than expected at 77.5 vs expectations for a 75.5 reading.