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Strategies & Market Trends : Technical analysis for shorts & longs -- Ignore unavailable to you. Want to Upgrade?

To: Johnny Canuck who wrote (25360)	2/27/2000 4:28:00 AM
From: Johnny Canuck	Read Replies (1) \| Respond to of 69001

Excerpt from bond report: 5. THE BOND REPORT By Barry Habib (See Barry live on CNBC on Wednesday morning at 8:40 AM ET) The Fed said that they have no intention of raising margin requirements. That has helped Nasdaq stocks continue to rocket higher. Recent weakness in the Dow stocks is, in part, responsible for the decline in Treasury Bond and Note yields. This decline has left mortgage-backed securities (MBS) behind, causing mortgage rates to remain high. This unusual inversion of the yield curve is cause for frustration among individuals in the home buying market. They see publicized Treasury yields dropping but mortgage rates rising. Weakness in the large cap end of the stock market has resulted in a huge influx of liquidity into Treasury Bonds and Notes. This money is not a long-term investment; it is earmarked temporarily as a place to park funds before coming back into the equity markets. Treasuries are more liquid than MBS, and are therefore the instrument of choice for investors waiting on the sidelines for the market to settle. With the economy still booming, fears of higher interest rates abound. Established stocks that are tied to historic valuations are hardest hit while "New Economy" high flyers appear to be insulated from fears of higher rates. With more rate hikes likely, there could be more selling of the established issues. This will add liquidity to the overall bond market and eventually level off the yield curve. Once a perceived bottom is hit, funds should come roaring back to equities. This should push rates in all instruments higher. For now, it's a stock pickers market as the narrow leadership continues. As for mortgage rates, Adjustable Rate Mortgages (ARM's) provide the best value by far. Barry Habib www.cmaloan.com