THE DAY AFTER Quiet today after the holiday; there is not much this week in terms of economic reports. Treasury will auction $61B of notes and bonds this week, 3 yrs, 10 yrs and 30 yr bond. Markets should have time to digest the June employment report that looked very good on the headlines but still not as good as the headlines would suggest. The well-worn adage that characterizes investing, “climbing a wall of worry”, is definitely alive and well in this run-up of equity market prices. The stock market continues to increase and as the indexes continue to make new highs, the worry factor seems to increase. Yet no matter the debate about wages too low, housing markets struggling, and health care costs taking away potential consumer spending; it is onward and upward for stocks. So far this morning the bond and mortgage markets are flat with little change from last Thursday; the 10 -1 bp at 2.63% but MBS prices unchanged. Technically, bearish; as long as the stock market is in favor it is unlikely interest rates will decline. The bellwether 10 yr is managing to hold below its 100 day average on its yield.
Posted on: Mon, 07 Jul 2014 16:13:42 +0000
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