Market Review as of June 5th 2007

Highlithts: Bernanke said on June 5th that core inflation remains elevated, though officials have seen a "gradual ebbing". He also said tighter lending standards for mortgages will trestrain housing demand... Why the market went down today? The service report (ISM non-manufacturing) shows that the economy is picking up. Last week, the unexpected job growth (non farm payroll) and higher-than-expected grwoth in manufacturing sector also suggested for a pickup. This reduce the chance of rate reduction in the near term future.