Capital Market Briefing - 23rd Jan

Headline News:
- December Housing starts below expected 605000. Actual 550,000. Lowest since 1959 (since recording started). Building Permits also drop to 549K vs estimate of 600K. Jobless claims rise to 589K as of the week end of 17th Jan. (Commerce Department)

- General Electric Earnings: GE Net earnings down 44% (in line with expectations). Warns of slowdown. Cancelled orders for big equipment is a concern. GE Capital is the biggest looser. GE energy does well. 50% mgmt incentives now based on cash flow generation. Might need to cut dividends or risk loosing AAA rating.S&P downgrades AAA rating to negative from stable (1 in 3 chance of downgrade).

- Sony Earnings:

- Australia Stimulus

- Japan long term bonds

- Treasury Yields Beginning to Rise/Prices falling on Supply Concerns. Undoing the effect of lower int rates?

Obama pressed congressional leaders yesterday to reach a consensus on an economic stimulus plan expected to cost $825 billion, warning the U.S. may be facing an “unprecedented” economic crisis. The president said the legislation is “on target” for passage by mid-February.

Goldman Sachs Group Inc. on Jan. 22 raised its 2009 Treasury borrowing estimate to $2.5 trillion. The firm estimated the deficit this year at $1.4 trillion.

The Treasury will auction $8 billion in 20-year Treasury Inflation Protected Securities, or TIPS, on Jan. 26; $40 billion in two-year notes on Jan. 27; and $30 billion in five-year notes on Jan. 29.

The benchmark 10-year note yield, used to set corporate borrowing costs and mortgage rates



Yield Curve:


Spreads:



Key Rates:



Equities:



Options:


Prediction for next week: