MARKET MINUTE – IS PAUL TUDOR JONES CALLING THE TOP?

Not a whole lot going on this morning aside from the Bernanke testimony. He continues to downplay inflation woes, says the labor market recovery will be weak and that there are signs of economic recovery. All in all, it’s more political show than anything market moving….

The most important news of the day might be a rumor about hedge fund titan Paul Tudor Jones. This is pure speculation, but there are rumors that he is calling a top in the S&P 500. He also believes bonds could rally from current levels. But again, this is pure speculation.*

The Portuguese 10 year bond is hitting an all-time high as I type. There’s little doubt that the ECB would step in to bailout Portugal, however, if the market moves onto Spain it could create substantially more political upheaval in the region. Ultimately, bailouts are still the name of the game in Europe, but Spain’s situation would add a level of uncomfortable uncertainty to the situation and Portugal is merely the stepping stone.

The Mortgage Bankers Association is reporting that demands for home loans is being “sapped” as interest rates hit a 10 month high. It’s difficult to see how QE is having the positive credit impact that Ben Bernanke says it is having:

“Applications for U.S. home mortgages dropped last week as the highest interest rates in 10 months sapped demand for home loan refinancing, an industry group said Wednesday.

The Mortgage Bankers Association said its seasonally adjusted index of mortgage application activity, which includes both refinancing and home purchase demand, fell 5.5 percent in the week ended Feb. 4. The MBA’s seasonally adjusted index of refinancing applications fell 7.7 percent last week. The gauge of loan requests for home purchases was down 1.4 percent.

Fixed 30-year mortgage rates averaged 5.13 percent in the week, up 32 basis points from 4.81 percent the prior week. It was the highest rate since the week ended April 9, 2010.”

* The Tudor Jones rumor is being denied according to Zero Hedge….

Cullen Roche

Mr. Roche is the Founder and Chief Investment Officer of Discipline Funds.Discipline Funds is a low fee financial advisory firm with a focus on helping people be more disciplined with their finances.

He is also the author of Pragmatic Capitalism: What Every Investor Needs to Understand About Money and Finance, Understanding the Modern Monetary System and Understanding Modern Portfolio Construction.