From The Desk Of Laura Wheeler

Morning News….”The House passed the tax cut extension bill late yesterday after political wrangling caused some momentary concerns. The bill passed with a surprising amount of support and a final vote tally of 277 to 148. The bill will now makes its way to the President’s desk for signature at which point Americans can rest assured that their paychecks will not be cut by an increase in tax rates on January 1^st. In other news, Senate Majority Leader Harry Reid pulled the $1.1 trillion spending bill to keep the government funded last night amidst Republican opposition. The bill was laden with over $8.3 billion in earmarks.”

November’s 1.1% rise in the Conference Board’s Leading Economic Index, while in line with expectations, was the strongest rise since March. The overnight treasury bounce was helped by Asian/Japanese real money buying and Moody’s five-notch Ireland downgrade. Bonds have rallied over the past 24 hours and the 10-year has traded back down to a low of 3.39% this morning, 17 bps lower than it traded yesterday morning. Early buying today has touched the 8-day moving average for the first time since the breakaway sell-off earlier this month. The 8-day, now at 119-305, often proves to be a strong resistance point during a bearish trend. We would need to see a decent close above 119-305 to further moderate the bearish trend, and we still feel that any rally is a selling opportunity. On a side note, the Dow Jones Industrial Average had its highest close at 11,499.25 yesterday since September 2008. The DJIA is up 76% from its lows back in March 2009. It is, however, still down 19% from its 2007 highs.

Have a great weekend!