Market Analysis

Bonds improved early in the morning on weakness in the stock market which was partially caused by speculation that Japan's sovereign debt may be down graded due to their large deficits.  In mid morning trading the stock market improved on a better than expected consumer confidence index but before damage could be done to bonds, results of today's 2 yr Treasury note auction were released which showed strong foreign bidding.  As such bonds held their morning gains.

In economic news today, the November Case Shiller home price index showed a 5.3% YTD drop which was very close to the 5% expected drop and an improvement from October's 7.27% YTD decline.  The Conference Board's Consumer Confidence Index increased to 55.9 which was higher than the 53.5 expected value.