A 4-day rally gets stopped at the border…  Home Prices fall at a -18.12% pace…  Alice Rivlin gives her 2-cents… * Kiwi bond maturities galore next month… And Now… Today’s Pfennig! Good day… And a Wonderful Wednesday to you! As tradition with the Pfennig would have it, here’s my introduction to July… There I was… On a July morning… Looking for love… With the strength of a new day dawning, and… The beautiful sun…

Yes, for those “old rockers” from the 70’s like me… That’s Uriah Heep, at their best!

OK… So, welcome to July! The last day of June was quite the volatile one to say the least! There we were waiting for the S&P/CaseShiller Home Price Index to print, and show that home prices were still down by quite a bit, when it did, it did, it printed at -18.12%… But! The media was all over that like a cheap suit, clamoring that

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U.S. stocks slumped for the first time in five sessions after a report showed U.S. employers cut more jobs than expected.  A government report showing factory orders grew less than expected also dragged shares lower.  Meanwhile, Fed Chairman Ben Bernanke cautioned that the government cannot borrow indefinitely to finance the shortfall and urged lawmakers to work towards reducing the fiscal deficit. The DJIA declined more than 65 points to 8675, and the S&P, while holding above a key technical level of 928, closed the day 1.4% down.  Technology focused NASDAQ was off 0.6%.  Trading continued to remain light with only 1.3 billion shares exchanging hands.  Market breadth was negative as declining stocks outpaced advancing issues by a seven-to-three margin. The US dollar gained versus other major currencies, closing up 1.1% against a basket of currencies.

Stock futures point to a higher opening on the Wall Street, amid ECB and

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The markets finally took a long deserved breather today, but not before rallying near the closing bell to cut the days losses in half.  The Dow Jones Industrial average was down 65.63 to 8,675.24 for a loss of 0.75% on the day.  The Nasdaq Composite and Standard and Poor’s 500 lost 10.88 and 12.98 respectively to close at levels of 1,825.92 and 931.76 representing losses of 0.59% and 1.37%.  The broader U.S. equity market had turned in five straight days in the green and many market participants saw this one coming.

The biggest piece of news for the day came from the Federal Reserve’s Chairman Ben Bernanke and his comments regarding the monetary policy, fiscal policy, and national debt levels.  Bernanke gave a speech to the House Budget Committee and urged them to take responsibility when it comes to the handling of the countries finances.  He says that using the

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Federal Reserve Chairman Ben Bernanke testified before the House Budget Committee Wednesday calling for fiscal balance and voiced the need to limit debt issuance, presenting a less than rosy picture, including a projected $1.8 Trillion federal budget deficit and rising Treasury interest rates over concerns about the deficit.  He said the Fed has limits and will not monetize the debt.  Stocks did not respond well.

MARKET ACTIONS TODAY

Here is how US stocks, non-US developed market stocks and emerging market stocks acted today:

Here is how US bonds, non-US developed market bonds and emerging market bonds acted today:

Here is how different types of US bonds acted today:

SELECTED BERNANKE TESTIMONY

On Fiscal Management: “Maintaining the confidence of the financial markets requires that we, as a nation, begin planning

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For Immediate Release

Chicago, IL - June 1, 2009 - Zacks.com releases the list of companies likely to issue earnings surprises. This week's list includes Shanda Interactive (SNDA) and Layne Christensen (LAYN). To see more earnings analysis, visit http://at.zacks.com/?id=3207.

Every day, Zacks.com makes 4 stock picks available, free of charge. To see them, go to http://at.zacks.com/?id=3567.

The Week's Events

Ciena (CIEN) is the only S&P 500 (SPX) member reporting this week. Forecasts call for the company to have lost 15 cents per share last quarter.

Joining CIEN will be 73 other companies.

The light earnings calendar will make way for a fairly packed economic schedule. We'll get the latest ISM surveys, more housing data and May employment numbers.

Monday: May ISM manufacturing survey, April construction spending, April personal income and spending Tuesday: April pending home sales, May auto sales Wednesday: ...

Ciena (

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We highlight UnitedHealth Group Inc (UNH) and Humana Inc (HUM).Congress approves budget and sets the stage for Healthcare reform On Wednesday, April 30, 2009, the House and Senate approved a fiscal year 2010 budget that begins October 1, paving the way for healthcare reform. The budget passed the House by a vote of 233 to 193, with no Republicans in favor, and included language that would enable the Democrats to expedite under special rules the consideration of healthcare reform legislation despite Republican opposition. That said, Democratic leaders have said they will try the normal legislative route first.The budget, as proposed by President Obama, includes $634 billion over 10 years as a "down payment" for health reform.The House Budget Committee statement said if healthcare reform legislation could not be achieved through regular procedures, the budget's reconciliation instructions require committees to report ...

Credit fears ease…  Chuck’s thoughts from the road… India cuts rates… China growth slows, but is still 9%… And Now… Today’s Pfennig! Good day…And welcome to what should be another volatile week in the markets. Credit worries eased somewhat over the weekend, which helped push money back into the higher yielding currencies. Today Federal Reserve Chairman Ben Bernanke will head to Congress to share his view on the economy. Should make for a pretty interesting day of trading. Hope you are sitting down and holding on, it looks like we are going to take another lap on the currency roller coaster!

The yen fell over the weekend as investors began moving funds back into the higher yielding currencies of Brazil, Mexico, New Zealand and Australia. I won’t go into the whole explanation of the carry trade again, but suffice it to say that these moves haven’t proven to have much staying

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We mentioned immediately after the first stimulus plan (the $170B rebate checks - i.e. sending money directly to China (Walmart) and Middle East (gas)) that another one would be announced as the economy worsened. Keep in mind at the time, there was no agreement that any recession would even occur - so it was a pre-emptive strike! It looks like our prediction is gaining steam. Now that we simply are making a mockery of any budget or our national debt, we can ask for anything and get it. A second economic stimulus package gained sudden momentum after Federal Reserve Chairman Ben Bernanke urged Congress to consider a new plan and the White House said President Bush was "open" to the idea. Bernanke's remarks before the House Budget Committee marked his ...

Yesterday, while all eyes were focused on the testimony of Secretary Paulson and Chairman Bernanke, there was another hearing going on in the House Budget committee.  In it, the head of the Congressional Budget Office (CBO, non-partisan), Peter R. Orszag, provided some very insightful thoughts on the matter.  The full testimony is available at http://cbo.gov/ftpdocs/97xx/doc9767/MktTurmoil.htm.  However, here is part of it with my interpretation/translation:

"Over the past several weeks, the collapse of confidence in financial markets has become particularly severe. Short-term loans between financial institutions have fallen off sharply. Instead, the Treasury and the Federal Reserve have become the financial intermediaries for them. In other words, rather than financial institutions with excess money lending to institutions needing short-term funding, many institutions with excess short-term money have purchased Treasury securities, the Treasury has placed the proceeds on deposit at the Federal Reserve, and the Federal Reserve has then lent the money

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