| Last | Change | Percent | |
| S&P Futures | 1444.8 | 7.9 | 0.55% |
| Eurostoxx Index | 2513.6 | 14.8 | 0.59% |
| Oil (WTI) | 92.8 | 0.3 | 0.35% |
| LIBOR | 0.354 | -0.001 | -0.35% |
| US Dollar Index (DXY) | 79.67 | -0.159 | -0.20% |
| 10 Year Govt Bond Yield | 1.65% | 0.02% | |
| RPX Composite Real Estate Index | 194.5 | 0.3 |
Markets are higher this morning on speculation Spain is preparing to ask the ECB to purchase its debt. The stock market definitely feels like the path of least resistance is up, though it could be the calm before the storm - Alcoa kicks off earnings season next week. Notable earnings warnings so far include Caterpillar and FedEx. Bonds and MBS are down / flat.
Yesterday's ISM Purchasing Managers Report was reasonably constructive. The headline number of 51.1 means that the economy should expand at roughly 3% or so, at least according to historical trends. Production and backlog were the weak spot, while employment and prices were areas of strength.
The Washington Post has an article which shows what the Fed is up against: Even though interest rates are at rock bottom levels, savings deposits continue to increase. Risk aversion and the desire to replenish lost savings are behind the phenomenon. Even though the stock market has rallied, the lack of volume indicates that retail investors are not putting money to work there. Aside from the risk appetite considerations, it also demonstrates why consumption remains weak.
You know who loves this situation? Corporate America. As if on cue, I just received an email saying WellPoint is issuing $1.5 billion of senior unsecured 30 year convertible bonds tomorrow with a price talk of 2.5% - 3% coupon, 20% - 25% premium. To put that in perspective, the 30 year government bond is at 2.8% and WLP pays a 1.9% dividend. Old time convertible arbs are shaking their collective heads at that one.
Finally, Bill Gross on budgetary crystal meth and the ring of fire.
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