Market Analysis

In what has been a continued pattern this week, news-grabbing headlines are serving to trump the underlying better-than-expected economic news and support the "flight-to-safety" trade which has kept 30 yr mortgage rates below 5%.  This morning the big news is Standard & Poor's downgrade of Goldman Sachs stock to "Sell" due to news that federal prosecutors are looking into whether to charge the bank with criminal charges related to the way they bundled and sold mortgage-backed securities while at the same time "betting" against them.  This news is driving stocks, which had opened higher, slightly lower now.

In economic news, the Advance Estimate for 1st Qtr 2010 GDP came in projecting 3.2% growth, which was slightly lower than the 3.3% projected growth but which makes for 2 positive quarters of GDP growth.  The Chicago Purchasing Manager's Index came in at 63.8 vs expectations of a 59.9 reading.  The final April University of Michigan Consumer Sentiment index came in at 72.2 which was better than the 71.0 the market was expecting.