The Dollar Slide Continues

Mortgage bonds are falling once again, caving to the continued upward momentum of the stock markets. As bonds get closer to the lows they experienced back in Mid-March of last year, we can anticipate rates to climb to levels that even exceed those from that same time.  That would signify early last year as the beginning stages of a longer-term bear market.  It seems that the Trump Administration’s goals to ignite the US economy will come at a cost to certain segments.  One including those impacted by higher interest rates.  With the dollar continuing to slide in value, there will be winners and losers.  Big corporations that operate globally can expect to see international sales tick higher.  However, smaller companies that manufacture goods in other countries to trim their manufacturing costs to keep up with the big corporate giants will suffer. This will be an interesting shift for sure, and one we will monitor closely.

A comment made on behalf of the IMF (International Monetary Fund) conformed that some Central Banks around the world are looking at using Bitcoin as their own virtual currency. That would certain improve the reputation many crypto-currencies have gained in recent months, with some believing the price of crypto-currencies show signs of a massive bubble.  Although Bitcoin lost 50% of its value recently, most acknowledge that the technology behind the currency is valuable; and many believe its value will continue to grow over time.

Initial Jobless Claims for last week were reported at 233,000. This represents an increase of 17,000 from the week prior’s report.  However, since that was the lowest level reported since 1973, the current report is still exceptionally low.  The challenge with the Trump Administration’s goal of creating more Jobs is that we are already at a 4.1% Unemployment Rate.  From where will the workers come?  That remains the burning question.  If able workers don’t leave the welfare and entitlement system, our economy could be in for trouble.

The technical picture remains ugly. We will continue with our locking bias.