Market Analysis

Bonds opened weaker in the morning and improved in afternoon trading. Mortgage backed securities (MBS) are generally not improving or are improving very slightly when US Treasuries are moving better. Stocks opened slightly down and then moved lower in afternoon trading on weakness in the banking sector due to fears about the exposure of US banks to the European debt crisis. The 10 Yr US Treasury is currently yielding 1.81%. The Dow is currently at 11,766.

Below is a recap of this week’s economic calendar:

Monday, Dec 19 – economic calendar vacant

Tuesday, Dec 20

• November Housing Starts and Building Permits – Starts expected at 627,000 annualized pace vs 628,000 in Oct. Permits expected at 633,000 annualized pace vs 653,000 in Oct.

Wednesday, Dec 21

• November Existing Home Sales – estimated annualized pace of 5.03 million vs 4.97 million in October

Thursday, Dec 22

• Initial Jobless Claims for the Week Ended 12/17 – expected 380,000 vs 366,000 prior week
• 3^rd Estimate 3^rd Qtr US GDP – expected 2.5% growth – unchanged from prior estimate
• December Final Univ of Michigan Consumer Sentiment Index – expected 68.0 reading vs 67.7 prior estimate
• Conference Board November Leading Indicators – expected .3% increase vs .9% increase in October

Friday, Dec 23

• November Durable Goods Orders – expected 2.0% increase vs -.5 percent decrease in October. Excluding transportation expected up .3% vs up 1.1% in October.
• November Personal Income, Spending and PCE Index – Incomes expected up .2% vs up .4% in October. Spending expected up .3% vs up .1% in October. Core PCE Index (excluding food and energy) up .1% vs up .1% in October.
• November New Home Sales – expected annualized pace of 313,000 vs 307,000 pace in October.