Thursday, May 7, 2009

Market Strengthens, Rates Rise

Dow Futures indicate a gain of 50 points when the bell rings this morning. It's hard to say what news is driving today's gain. General Motors reported a quarterly loss of $6 billion, compared to a loss of $3.3 billion a year earlier. Yet analysts were cheered that GM's loss was only -$9.66 per share instead of the expected $11.05 loss. Are we setting the bar too low?

Interest rate futures dropped sharply but quickly rebounded on optimism of a strenthening economy. While rates have waivered over the past week, the continuing strength in the stock market and additional $100 billion in treasury securities coming to market each month support increasing rates. It seems that even the worst news is turning out to be "better than expected." Still, there are others who expect things to get much worse going forward Dr. Doom Says Stress Tests Lack Credibility

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