Morning in Arizona

Morning in Arizona
Rainbows over Canyonlands - Dave Stoker

The Headline Animator

Tuesday, October 17, 2006

What is it, boy? Is Something Wrong?

The bond market awoke to the screams of a falling stock market today. A quick 100 point drop in the DJIA coincided with a spirited bond rally. The PPI came in lower than expected while the core PPI was greater than forecast.

A weaker than expected industrial production figure and a reported record net capital in-flows into US securities in August sustained bonds’ gains in the morning. Foreign central banks, in general, and Japan, in particular, are back buying US treasuries.

In the afternoon, indication of a stronger housing market reversed the fortunes of both stocks and bonds. Bonds ended the day unchanged.

Tomorrow, the CPI is the star of the economic data reporting show. Housing Starts and Building Permits will also make an appearance.

When watching the television program “Lassie”, growing up, his plaintive wailings signaled something amiss. But, what could it be?

If only a dog could talk.

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