Things are mostly stable today, with the major news as Goldman Sachs, and Greece (still.) With Iceland volcanic ash (believe it or not) keeping Greece from meeting with and finalizing their financing details with the European community, this is still leaving the market a bit unsettled, with respect to this — and flight to “safer haven” investments: bonds. In the case of Goldman Sachs, any news that unsettles the stock market will do likewise; and since this announcement Friday, money moved from the stock market into bonds.
For several days, we have been reporting that the consensus is that bonds will trade for the foreseeable future in the 3.7%-4.0% range, and this remains to be the case. Regardless of other market news, there is “strong resistance” (which is to say, a significant number of sell orders residing at the bond price that gives yields) at the 3.7%-3.5% range. So, any news would have to work to press through these levels to have an interest rate go below this range.
There are no expectations for rates to go significantly up from where they’re trading today, as the Goldman Sachs and Greece news promises to go on for some days yet, so nothing imminently looking to pull money away from bonds (which would reduce the price, and increase the yield and interest rate.) Moreover, the challenges facing Goldman are spreading overseas: Germany has asked for the SEC findings; and UK has filed a suit of their own against Goldman.
In the absence of something like strong economic recovery indicators (which implies concern for higher inflation, and tighter Fed policies with higher interest rates), there is continuing likelihood that bonds will trade right where they are for a while.
So, there is no pressing need to lock; but if you were in a position where you were going to need to do this anyway in a day or so, then today might not be a bad area to do them. If it were me (as a bit of a risk-taker) I would float them, and stay close to the news. –And this “staying close to the news” is exactly, by the way, why I’ve begun this blog. Thanks for following it.
