From Fannie Mae's Daily Market Commentary:

Of some interest, however, may be the downward revision of gross domestic product growth for the fourth-quarter of last year. According to the Wall Street Journal yesterday, recent economic data has prompted an analyst revision from the previous estimate of around 1.1% to one of 0.5% and some analysts are predicting a contraction instead of a quarterly increase.
...
On Wednesday, the Treasury will release its budget figures for December, the third month in the current fiscal year. Current estimates put the bottom line for the month at a surplus of $9.0 billion, a weak gain compared to the $26.6 billion surplus posted in December of 2001. For the fiscal year so far, this would translate into a deficit of $104.1 billion versus a deficit of $35.4 billion for the same period in fiscal year 2002. For all of fiscal year 2002, the bottom line was a deficit of $157.7 billion. Yesterday, President Bush's budget director, Mitchell E. Daniels, Jr., said that the deficit would probably top $200 billion this year and could reach $300 billion for fiscal year 2004.



A weak budget figure would remind bond traders that the government will be pressed to issue more debt securities (Treasuries) in order to fund its operations. This will be bad for the market since increased supply means lower value per unit.



Dubya: "The economy's fundamentals are lookin' great!"

--Robert