Slightly better news in the markets today although still remaining quite volatile. Bond prices are marginally up in response to the release of a few economic reports. Today the CPI (Consumer Price Index) and the core CPI came out with ‘on target’ results. The CPI hit below expectations of 0.2% at 0.1% and the Core CPI, which measures consumer inflation without the volatile energy and food prices, came in at 0.2%. The results may be connected with lower gas prices, but are still the lowest inflation readings over the past 8 months. Potentially the Fed may ease up on inflation worries with this news and focus on stabilizing this ‘credit crunch,’ much data and time is still needed in analyzing.
More good news came with the reported $121 billion of net foreign purchases of U.S. securities in the month of June. Despite the month old data, it provides a show of confidence in the market. However, the question on everyone’s mind is what the results will be for the struggling month of July. We will have to wait until next month to show the effects of this liquidation crisis. With this seemingly positive news amongst weeks of fears in inflation and liquidity, we recommend CATIOUSLY floating or when in doubt or fearful of the volatile market, always be safe and Lock.
By, Joe Brady
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