MBS RECAP: Underlying Stock/Bond Correction Still The Driving Force

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Posted To: MBS Commentary

While we can point to tonight's election results on the calendar, and imagine that they'll have an impact on financial markets, stocks and bonds simply continued doing what they've been doing since October 28th. That's when stocks and bond yields bottomed out in a move that was driven exclusively by heavy selling in stocks. Since then, they've been bouncing back slowly but surely. Friday's NFP reaction threw a bit of a wrench in the works as neither stocks nor bonds appreciated the implication of faster/more Fed rate hikes. There was a bit of healing yesterday as both sides of the market rallied. Today, however, it was back to the same old business of rates and stocks moving in the same direction. Today, that direction happened to be higher. It remains to be seen just…(read more)

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