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Daily Market Commentary

With the TED spread creeping back up into the 180's territory and treasuries and Canadas trading higher once again, there appears to be more trepidation in the markets.  No surprise really, after GE's terrible report Friday, the sentiment has decidedly turned towards pessimism.  GE bonds, which are AAA rated, sold off substantially on the news and are now trading cheaper than the big 5 banks discount notes. 

 

 

This morning Wachovia posted a big loss, substantially less than analysts' consensus.  This just goes to show how hard it is to value the assets that many of these financial institutions are sitting on.  They will cut their dividend and tap the market for about $7 billion in equity and convertible preferreds, which no doubt will be priced well below the market and cause significant dilution.

 

 

US Advanced retail sales came out just slightly ahead of expectations, after last month's declines.  This number rarely seems to surprise very much, as the US consumer seems to spend as much as they've got any time they've got it.  Treasuries are paring their gains after this release, and the yield curve is steepening in response.

 

 

Canadian New Vehicle sales declined substantially for February.  A seasonally weak month for auto sales, is compounded by the continued re-pricing of autos in Canada to bring them more in line with the US.  Many consumers here are going south of the border or waiting for dealers to re-align the prices.

 

 

Between earnings and economic numbers, there is plenty of data out this week, so it should be a volatile one.  Stay tuned.

 

 



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