The interest rate picture continues to develop as the market is becoming more concerned with inflation and potential weakness on the equity front. Many of the reports came out weaker than expected this week. Durable goods were surprisingly weak at -7.8% versus -3.0%.
The housing picture came out mixed as existing home sales increased more than expected to 6.46 million homes versus 6.24 million homes expected. New home sales were .937 million versus 1.080 million. The mortgage applications did increase this week to 626.1 vs. 606.6 last week.
Greenspan's comments made earlier in the week could not have been any more timely when he commented on the current economic cycle. He mentioned that it may be due for a correction. He even went as far as suggesting that the US could be in a recession by the end of 2007. With the extreme volatility in the Chinese markets this week, the US stock market broke major key technical areas to the downside on both near term and long term levels.
The market is keeping a close eye on all of the economic reports to determine the health of the US economy. At the moment, the probability of a rate hike likely declined this week as a result of the weakness in the stock market. The next FOMC meeting is March 20th and 21st.
Near Term Trend: Up; Long Term Trend: Down
Support: 108-10.0, 107-17.5, 106-06.5; Resistance: 109-07.0, 109-21.0
Chart copyright CQG, Inc.
Upcoming Key Reports:
3/5/07 -- ISM Non-Manufacturing Index - 9:00 am CST
3/6/07 -- Productivity & Costs - 7:30 am CST
Factory Orders - 9:00 am CST
3/7/07-- API Energy Stocks - 9:30 am CST
3/8/07-- Jobless Claims - 7:30 am CST
3/9/07 -- Monthly Unemployment - 7:30 am CST
US Trade Balance - 7:30 am CST
Wholesale Trade-9:00 am CST
