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Profentia: February 13th, 2015

Today’s data: No data this morning in this week of so little of it.

The trading session started out rather softly which is a bit of an odd word to use to describe it I guess. The equity side is doing very little as it again trades in the upper stratosphere and bonds are slipping a bit as risk-on is more liked than risk-off to end the week. I think the long weekend looming has something to do with the day, I wouldn’t be surprised to learn that the trading desks are thinly staffed as some will choose to make this a four rather than a three day break. Oil and gold are both up nicely so go figure on that one.

The Big Picture: The Ukraine and the Greek mess are our two major areas of concern.

The meetings go on and on and on and little progress is accomplished where so much is actually needed to create a more sustainable status quo. Although these two are separate national problems there appears to us to be a common thread between them and that would be the methodology of European politics; talk a lot, truly pontificate and do very little other than that. Meanwhile in one region people are killed in the acts of war and in the other region far too many suffer through daily as the essentials of life are nowhere to be found. Both are capable of being disruptive of the global economy with Greece probably the more threatening. The opinions are all over the map concerning Greece’s ability to leave the EU and the actual costs it might present. The Ukraine mess is more central to the EU region’s GDP (the lack thereof).

Investment Portfolio: The long bond sale yesterday did OK.

The metrics we use to judge success of these US Treasury (UST) auctions several times a month all pointed to a solid auction yesterday and it needs to be noted again as we did then, the sale went off when trading was at the highs of the day. At the time of the sale the long bond was up almost a full point and that makes bidding on the issue very troubling to those who aren’t intending to pop the issue right into a portfolio and enjoy it working toward a return goal of some sort. What has been most important to us of late has been the percentage of the sale that has been taken away by the non-dealer community which is the folks who are buying for portfolios under their control—we call them ‘going away’ orders. Yesterday once again that percentage in my perspective of three going on four decades in the markets is that the demand was colossal. About sixty five percent of the bonds went away; such a huge amount is unheard of in all my years until literally the last few years. Next week, shortened by the holiday will not have any supply coming but it will be an active week for data so we think trading will be influenced by the international developments as well as the pace of domestic progress.

Weekly Market Data

  • Friday
    02/13
    Open:Close:
  • Thursday
    02/12
    Open:Close:
  • Wednesday
    02/11
    Open:Close:
  • Tuesday
    02/10
    Open:Close:
  • Monday
    02/9
    Open:Close:

Current Market Levels from Bloomberg daily

  • Monday: 2/09
    No data
  • Tuesday: 2/10
    No data
  • Wednesday: 2/11
    No data
  • Thursday: 2/12
    Weekly Claims expected at 288k >>304k
    Jan. Retail Sales expected at -0.50%>>-0.9% reported
  • Friday: 2/13
    No data

Data is taken from sources considered to be accurate, most often that of an agent of the US Government; no guarantee of accuracy is suggested.

Past performance is not a guarantee or a reliable indicator of possible future results. Investing in the bond markets is subject to certain risks including credit (worthiness of the issuer), market (interest rate changes), inflation uncertainties over time and the possibility that investments may be worth more or less than the purchase cost when they are redeemed. U.S. Treasury Bills, Notes and Bonds are backed by the full faith and credit of the Government, certain U.S Agencies are also backed in a similar manner and certain other Agency Issuers are backed solely by the Issuing Agency itself. Portfolios that invest in those securities are not guaranteed and they will fluctuate in value with time. High-yield low rated securities involve greater risks than higher-rated securities and portfolios that invest in lower-rated issues will incur more risks than portfolios of higher-rated only securities.

This article contains the current opinions of the author, but not necessarily that of Alfstad Capital, LLC, and a branch office of Commonwealth Financial Network. The opinions of the author are subject to change without notice. This article is distributed for informational purposes only. Here-in contained forecasts, opinions and estimates are based upon proprietary research or from publicly published sources and should not be considered as investment advice or a recommendation of any particular security, strategy or investment product.

Information contained here-in has been obtained from sources believed to be reliable, but not guaranteed. No part of this article may be reproduced in any form or referred to in any other publication without written express permission of Alfstad Capital, LLC and Commonwealth Financial Network.

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