Tuesday’s tone was relatively better

After Monday's sell-off Tuesday's tone was relatively better.
Housing data were mixed but the signs seem to point to a gradual bottoming out in the real economy.
Even if there has been no significant improvement in employment or housing figures lately, it is a good thing that the numbers are no longer declining.
While the markets are fragile and are likely to be buffeted by headwinds out of Europe, the real economy should slowly start to mend itself.
The real economy will be helped mostly by the institutional factors underlying the world's largest economy: labor market flexibility, competition, growing demographic trends, and the rule of law.
As for the markets, they should trade mostly sideways (with a healthy dose of volatility) until the elections in November.
In the bond markets, secondary trading volumes have slowed down to a trickle.
The Barcelona – Chelsea soccer match garnered more interest than bonds on most trading floors.
It is almost as though the summer season (when trading volumes traditionally slow down) is here early.
The lone primary bond deal in the investment grade space was a multiple tranche deal from General Electric.
By contrast, there were several primary bond deals in the high yield market.
The market waited with bated breath for Apple's earnings (due to come out after the market close); with I-phone sales slowing down and competition heating up the market is nervous.
Late day headlines about a case of Mad Cow disease in California caused bond spreads for meat processor Tyson Foods and agricultural giant Cargill to widen out.
The market will look to the FOMC (Federal Open Market Committee) interest rate decision on Wednesday.
Later in the week the focus will shift overseas as first quarter results start to come in from Credit Suisse, Deutsche Bank, Santander and Barclays.