Stocks opened higher this morning but have since reversed course, as tensions in the Middle East sent crude oil higher on concerns of supply disruption. Higher oil prices could boost Stock prices in the energy sector and may help lift the entire Stock market later today, but the rise in Middle East tensions may also help Bonds improve as traders seek a safe haven for investments.
There are no economic reports due out today, and the Bond market faces another short holiday week--with the market closing early on Wednesday and remaining closed all day Thursday in celebration of the New Year. This holiday environment creates lower trading volumes, which can cause unexpected price movements and additional volatility.
Currently, Bonds are riding a nice wave higher; therefore, I recommend floating for now. But with rates already near 50-year lows, I may change to a locking stance if the situation changes. I will keep you posted.
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