MBS Day Ahead: Unfriendly Trends in Stocks and Bonds, But For How Long?

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Posted To: MBS Commentary

Bond yields and stock prices are beginning the day in moderately higher territory than yesterday. This keeps a negative trend intact for bonds (both in terms of the higher bond yields themselves as well as the higher stock prices that have gone hand in hand with January's correction). "Negative trends" vary quite a bit in terms of motivation, duration, severity, and the function served. In terms of motivation, this negative trend arguably only exists because markets had run so far in the other direction (lower bond yields and stock prices) heading into the new year. In terms of duration this uptrend in yields is actually fairly mature as yields have been rising for 2.5 weeks after rallying for just under 2 months. That's either a good thing or a bad thing depending on your…(read more)

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