I find it very interesting the way wall street is behaving in the recent days. As a mortgage advisor I watch the economic data and bond prices fairly closely. It seems the market is moving completly based on nonsense, not real data.

Fed's cut key rate by .25% yesterday. The market was 'disappointed' that they didn't cut by one half, so, there goes the market.

Today, Fed's announce a plan to auction $40Bil in 6 months loans to infuse more cash into the market to ease the credit crunch, and viola, markets back up.

Uh oh, maybe we shouldn't react so quickly, back down the market goes.

Did anyone notice factory orders Dec 5th? They were up, but look at revised numbers from the prior release, it was revised upward meaning the growth wasn't quite as much as expected.
 
Unemployment, in line with prior releases, but it didn't rise as expected. Should mean good news for the bond market, but nope.

Non-Farm Payroll, way better than anticipated, and last released revised upward.

All this means that investors should be feeling good about the economy, yet there is still flight to bonds. Good for home loan rates at least.

What do you think? Is the market just completly reacting on myth and word, or is the market actually taking time to look at the data and decide for itself which direction we are headed in?