Consumer data spur equities
Equities were all over the board this week, although the first half of the week was generally negative. Greenspan's comments to the Joint Economic Committee didn't help stock prices move higher. However, retail sales were stronger than expected and consumer attitudes appeared to be improving. The positive consumer news was offset by anemic industrial production along with the unexpected surge in producer prices.

Upside surprises weakened Treasury prices
Many pundits explained Thursday's sharp drop in Treasury prices (and rise in yields) as profit-taking. Basically, traders wanted to book profits following the big rate-cut rally. It is nearly year-end after all. In addition, October retail sales came out stronger than expected on Thursday and consumer sentiment figures were higher than expected on Friday. It is true that industrial production is anemic, but bond market players are accustomed to a weak manufacturing sector and discounted the report. The PPI spurt was discounted as well, although the headline number was bad news for bonds. All in all, bond investors realize that there is not much further for bond prices to rise (and yields to fall). The Fed is hardly likely to lower rates any time soon. The November cut should filter through the economy over the next couple of months. That means economic news should start to improve - usually a downer for the bond market.