Early Gains. Flat Afternoon. MBS Underperform Friday ended up offering a boring conclusion to a week that had at least some measure of excitement on Wednesday. Bonds started a hair stronger, lost ground modestly and then rallied to the day’s best levels by noon. From there, 10yr yields went perfectly sideways in an ultra narrow […]
Early Gains. Flat Afternoon. MBS Underperform Read More »
We know that a) Congress passed a housing bill which, if not signed within 10 days, becomes law anyway, and b) U.S. presidents are known to be candid. Once again, we see the intersection of housing, lending, and politics with not only the postponement by the President of signing the bill, but also the statement
Q2 has been one of the best quarters for stocks going all the way back to the dot com boom, even after the 4-5% pullback in June. This has created a massive quarter-end rebalancing need among money managers and we’ve seen that random volatility play out in both stocks and bonds over the past few
Sideways Start, Quiet Calendar, Quarter-End Volatility Potential Read More »
Mostly Holding Yesterday’s Big Gains Bonds began the day in modestly weaker territory, but not weak enough to take 10yr yields above the 4.42% technical level. That was a notable development even before considering subsequent movement. The 8:30am PCE inflation data made room for a friendly reversal with modest losses being replaced by modest improvement.
Mostly Holding Yesterday’s Big Gains Read More »
Mortgage rates had a great day yesterday, moving within 0.01% of the lowest levels in more than a month. They dropped just a bit more today and are now officially the lowest they’ve been since May 14th. Today’s improvement was more of an afterthought, but nonetheless helps legitimize yesterday’s heavy lifting as something other than
Lowest Mortgage Rates Since May 14th Read More »
Around the country, originators seem less focused on the housing bill signing ceremony postponement than on “opportunity.” There are opportunities, but not for every LO. There is the opportunity (and goal) of senior management to make their company immune from economic and world political turmoil. There is the opportunity to anchor the business to things
The PCE price index may be a less timely report than CPI/PPI when it comes to measuring inflation in the U.S., but it’s more thorough and has stronger implications for Fed policy. Traders were apparently braced for today’s number to be a bit hotter. Bonds rallied moderately after core monthly PCE came in as-expected at
Decent Start After PCE Comes in On-Target Read More »
What’s Up With Today’s Big Rally? (Spoiler Alert: Quarter-End Rebalancing) Stocks went on a tear in Q2 with the S&P up 20% as recently at June 16th. AI-adjacent stocks were up over 50%. Bonds lost ground over the same time. That means the 60/40 stock/bond portfolio targets were thrown way out of whack, at times approaching
What’s Up With Today’s Big Rally? (Spoiler Alert: Quarter-End Rebalancing) Read More »
Rate momentum shifted noticeably on Wednesday. The underlying bond market saw heavy buying in pre-market trading–likely a result of large-scale quarter-end rebalancing among the largest money managers (i.e. adjusting balance of stocks vs bonds in investment portfolios). Excess demand for bonds = lower rates, all else equal. It also hasn’t hurt that oil prices continue
Mortgage Rates Quickly Approaching 1-Month Lows Read More »
“Why did the Dalai Lama go to Las Vegas? Because he loves Tibet.” It’s 107 F here in Las Vegas. Some would say, “It’s summer, what do you expect?” (No one expected 40 people to die in France trying to escape the heat.) Lenders and servicers are wondering, if push comes to shove about A/C