Cautiously Floating

Stocks have started the day lower, and that can be credited to certain aspects of forecasting future business.  Both Alcoa and FedEx referenced a lower demand in China and Europe in their 2013 outlook.  Investors must be torn between continuous reminders of the reality of world economies and how much support QE3 can offer.  mortgage bonds have slid for the last 4 trading days, but may be stopping at the 25 DAM for support.  Interest rates have moved up from the all time lows, yet still remain in a new lower range.  There is a $21 billion auction of 10 year notes to contend with today.  In addition, the Fed’ Beige Book will be released today as well.  We will continue with a cautious floating bias.