Today’s calendar includes important reports on July home prices from CaseShiller and September consumer confidence from the Conference Board.
From Vining Sparks:
Home prices are expected to rise 0.75% MoM and confidence is expected to jump 2.5 points after the U of M survey showed a surprising jump. We will also get the Richmond Fed Manufacturing Index (September) and the FHFA Home Price Index (July). Fed Bank President Plosser and Treasury Secretary Geithner are scheduled to speak today. Treasury will be auctioning $35 billion in 2-year notes which will be a good indicator of demand following last week’s disappointing TIPs auction.
The yield curve continues to flatten. The long Bond is now trading back at 2.89% while the 10-year yield has dropped back to 1.70%. Stocks have remained fairly flat after spiking 1.5% immediately after the QE3 announcement. The interesting thing to figure out has been the drop in commodity and oil prices following the QE3 announcement. While they jumped higher originally, they have since fallen back to lower levels than before QE3. Thus far, the markets have responded with disbelief that QE3 is the solution. ”