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Strategies & Market Trends : Joe Stocks Trader Talk

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To: Joe Stocks who started this subject2/18/2002 8:05:55 PM
From: Joe Stocks  Read Replies (1) of 787
 
Treasuries: This from Friday about the strength in treasuries. This from Bond talk:
There are several reasons for the current uptick in Treasuries. First, there is talk of a large asset allocation trade, with a large investor said to be selling equities in favor of Treasuries. The player is said to have sold Nasdaq futures. Second, today's economic reports, were favorable for the Treasury market. Modest inflation (PPI), another decline in industrial production (albeit the smallest decline of the 15 declines posted in the past 16 months), and weaker-than-expected consumer confidence have drawn investors to Treasuries. Third, heavy buying of long-dated paper by prominent names has lured other investors into the market and driven out short sellers. Fourth, Treasuries are likely benefiting today from anticipation of a long weekend. Although not usually a valid explanation, these days it is rational to think that investors might want to reduce risks to their portfolios ahead of a long weekend. Indeed, in an environment where the risk premium for unexpected events has increased, market participants could shun riskier assets in favor of Treasuries. Tensions in the Mid-East and fears of new revelations on issues related to corporate governance are two rational reasons why risk aversion could be higher ahead of a long weekend.

Joe
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