The Makings of a Breakout...

It's too early to go counting our chickens, but can count our eggs... and this Monday morning, has brought gains to our market which, should they hold, will lead to better pricing later today.

We have a couple of things going for us this morning. First the stock market as a whole is trading lower today. Moreover about two thirds of all stocks are trading down. This broad downtrend (although we really should be careful using the word "trend") suggests overall weakness in our economy which entice investors into our market.


You'll notice on the daily snapshot that the treasury yield has taken a strong turn down, which as expected has lead to better pricing in our market. This is the converse relationship between treasuries and MBS at work. With that said, because spreads are so large, we do have some room to move on the other side. In other words, we can afford minor gains in the treasury yield without our seeing the mortgage backed securities sell off. This explains why our market held over the last few days as treasuries sold off and their yield rose back above 3.000%.

We are back trading at the highest levels the mortgage backed securities market has posted on record. All things considered, this afternoon's rate sheet should be very attractive. If you are in the market and still floating, take a hard look at it. If you are not already in this market, now would be the time to give us a call and get started. 760.730.5040