Cautiously Floating

Yesterday gave us the single biggest down day of the year in the stock market.  The Dow lost about 300 points, closing below the psychological 13,000 point.  Today, Initial Jobless Claims came in at 355,000.  Although the number was an improvement from last week, the markets have clearly gotten used to a figure in that range.  Stocks are slightly lower today so far, whilemortgage bonds are improving.  Today’s bond auction garnered an “A” rating, causing a brief rally in the market.  Now that the election is out of the way, investors are back to focusing on the “fiscal cliff” as well as Europe’s delicate condition.  It appears that pressure is on Germany, as they are seeing signs of an economic recession.  With Germany being the strongest engine of the European economy, any misfires or stalling could lead to a very rough situation.  We will maintain a very cautious floating bias.