Daily Market Commentary
March 13, 2007
At the risk of sounding like every other business news reporter on the planet, sub-prime pain has spurred a flight to quality, giving a bid to the bond market yesterday. There was very little else to trade on yesterday.
Today, however, 10 yr treasuries are back to 4.50% on a weak retail sales print. Retail sales less autos actually dropped in February. This is more evidence to me that the housing pain isn't over, and it will continue to be a drag on the retail sector. As more lenders tighten their standards (I hesitate to use the words standards, as all you really needed was a pulse to get a mortgage), it will inevitably weigh on the other sectors where consumers spread their money. This makes watching job numbers more important than ever. As long as employment (and paycheques) remain firm, their shouldn't be any panic from this downturn.