Bonds Skyrocket on Negative Sentiment

U.S. 10-year Treasury bond prices continued to rally into record territory,
pushing further into 2-year highs. No major news was reported to push the move,
but bonds seemed to move on underlying negative sentiment surrounding U.S.
housing and mortgage markets. Housing reports due out this week have the
potential to create more worries, and bonds rose today, partly in anticipation
of more negative news.

The majors were mixed today, after a bad week last week for the dollar. Last
week, the dollar fell to new records versus the euro, and also fell to yearly
lows against the yen. The yen opened weak today on equity strength in the U.S.,
but has since risen back, in line with the flat U.S. markets. The euro was up on
the dollar, but down on the yen. The yen was down across the board, and the
dollar was mixed. The dollar has been free-falling, as a combination of slow
housing growth and credit worries have led to traders predicting a recession for
the U.S. economy.

After nearly hitting new record highs above $99 a barrel today, crude oil
fell slightly to close down about 0.6%. Crude has been pushing into new record
highs for over a month now, on concern that demand is far outpacing supply. OPEC
has not motioned it has any plans to boost output, which is also helping to move
prices higher. Natural gas futures were slightly higher.

Gold prices were basically flat today. Gold normally trades inversely to the
dollar and with oil, and today, gold was basically stuck between a weak dollar
and falling crude prices. Copper futures rose about 0.3%.

Grains were mixed. Soybeans rose about 0.3%, while corn fell about 0.8%.

Stocks plunged again on Monday, with losses accelerating late in the day.
The steady drip of negative news from financial firms exposed to the credit
crunch has turned into stream, and may yet turn into something unstoppable.

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Stock Market Recap

Economic News

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