16 Jul Very cautiously floating
Stocks are lower this morning after the Dow and S&P 500 closed at record highs yesterday. The Consumer Price Index came in today, and the inflation factor was higher than expected. The rise was attributed to the rising cost of food and energy, as the Core CPI, which removes these factors, was in line with estimates. The NAHB reported that Home Builder Sentiment hit a new high, not seen in 7 ½ years. mortgage bonds are hovering along the even mark for now, so there are no real changes to interest rates from yesterday. Bond prices are pushing up against a level of resistance, so a turn lower from here would not be too surprising. If that occurs, interest rates will be pressured higher. Many are waiting for tomorrow as Ben Bernanke appears in Washington to exchange opinions with politicians. We can maintain a cautious floating bias, with a finger on the trigger to lock.