THE BASIS POINT

Fundamentals 8/22: Volatility. And A GDP Chart.

We are starting the week with “VOLATILITY” written in large letters so any deviation of fundamentals from expectation could have an outsized result.

Chicago Fed National Activity Index (July)
-Level -0.06
-Three-Month Moving Average -0.29

New Home Sales are Tuesday, Durable Goods Orders are Wednesday, and Friday has 2nd look 2ndQ2011GDP, Consumer Sentiment, Corporate Profits and a speech by Bernanke in Jackson Hole, Wyoming. GDP consensus is 0.7% to 1.6%. If that comes in lower, that coupled with the bullish Treasury techs could set off a rally in Treasuries driving yields to record lows. The nagging concern is that a sovereign debt crisis in Europe could set off a banking crisis there.

GDP