Friday, October 31, 2014

Trick or Treat?

18,031 Single Family homes for sale
9,329 Single Family homes pending sale
5,238 Single Family homes SOLD this month

Ever wonder what area a zip code covers? Here ya go!

TRICK or TREAT! The trick; how to drive global stock markets higher. The treat; the Bank of Japan treated markets with an unexpected increase in monetary stimulus overnight. The reaction; sent stock bourses substantially higher in early trading this morning. At 9:00 the US markets trading in the futures markets were pointing to an all-time intraday high for the DJIA and the other indexes on fire. The bond and mortgage markets taking a hit so far with stock markets roaring.

It is interesting to listen to the CNBC commentators this morning; one would think Helicopter Ben was dropping $1000.00 bills across the country. The Bank of Japan set the world on its heels with the stimulus announcement. It wasn’t expected, and the massive amount is shocking; between what the bank is saying it will do and the GPIF saying it would buy anything around the world equity markets are on fire, The bond market still OK given the circumstances. Maybe the bond market isn’t quite as excited yet about the news from Japan as equity traders are now.

The bond and mortgage markets a little weaker but given the news from Japan and the reaction to it in the equity markets, treasuries are not suffering too much so far. Technically the 10 yesterday tested and held its 40 day average, so far today it tested it again and has held. Stocks rallying because Japan’s pension funds are going to buy global investments, and where better than in the US. Volatility remains high for equity markets but at the moment the bond market is rather stable given the backdrops. All that said, we are not as bullish as we had been; if the 10 closes above 2.35% we will have to accept the bullish bias turning more bearish. 

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