If you absolutely, positively want to postion yourself to be successful in today's market!
By the time stateside trading opened this morning, both bonds and stocks were already in the fast lane. Escaladed fighting in Libya and sovereign debt issues resurfacing (PIGS nations of Portugal, Ireland, Greece and Spain) pushed stocks and oil lower while giving a boost to bonds. Jobless Claims rose 26K to 397K yet Continuing Claims fell 20K. The latter is more of a function of Americans running out of benefits. The bump in Weekly Claims brings into question the strength of our employment recovery. Keep in mind that this index is extremely volatile. In other news, Bill Gross, the godfather of bond investing at Pimco, has sold all positions in U.S. Government related debt in his flagship fund, Pimco Total Return. Reason given is due to projected record budget deficits and the impact on inflation. He also said that Pimco may re-enter the market when interest rates rise from current “artificial lows” created by Federal Government purchases (QE1, QE2, and maybe QE3). His timing maybe a little early given MENA, Euro debt issues, and our uneven recovery but just the same, this guy knows his stuff and it paints a picture of interest rates rising as the year goes on. 13 billion of 30 year bonds hit the auction block as well today. We’ll report the outcome shortly after high noon CST. Technically, the chart is range bound with stability at lower yields. This suggest bullish potential and/or a higher probability of lower interest rates/better mortgage pricing. Trouble is that the signal are not very strong. Our bias is neutral with an edge to the bulls but at the same time we like being defensive. Reason is that the fast money crowd follows the headlines and money is getting thrown around like my wife at the mall. She’ll love that one. Currently, the 10 year note is trading at 3.46%, fading from the early morning gains. Mortgage backs are off their highs ( we priced plus 5/32’s), now up 2/32’s. Be careful. Stocks are off 155 points on the big board. Interesting charts below on Gold and Oil. Both have broke their uptrend and look to be heading for a powerful correction.
PRIMELENDING/SVP- CAPITAL MARKETS
By the time stateside trading opened this morning, both bonds and stocks were already in the fast lane. Escaladed fighting in Libya and sovereign debt issues resurfacing (PIGS nations of Portugal, Ireland, Greece and Spain) pushed stocks and oil lower while giving a boost to bonds. Jobless Claims rose 26K to 397K yet Continuing Claims fell 20K. The latter is more of a function of Americans running out of benefits. The bump in Weekly Claims brings into question the strength of our employment recovery. Keep in mind that this index is extremely volatile. In other news, Bill Gross, the godfather of bond investing at Pimco, has sold all positions in U.S. Government related debt in his flagship fund, Pimco Total Return. Reason given is due to projected record budget deficits and the impact on inflation. He also said that Pimco may re-enter the market when interest rates rise from current “artificial lows” created by Federal Government purchases (QE1, QE2, and maybe QE3). His timing maybe a little early given MENA, Euro debt issues, and our uneven recovery but just the same, this guy knows his stuff and it paints a picture of interest rates rising as the year goes on. 13 billion of 30 year bonds hit the auction block as well today. We’ll report the outcome shortly after high noon CST. Technically, the chart is range bound with stability at lower yields. This suggest bullish potential and/or a higher probability of lower interest rates/better mortgage pricing. Trouble is that the signal are not very strong. Our bias is neutral with an edge to the bulls but at the same time we like being defensive. Reason is that the fast money crowd follows the headlines and money is getting thrown around like my wife at the mall. She’ll love that one. Currently, the 10 year note is trading at 3.46%, fading from the early morning gains. Mortgage backs are off their highs ( we priced plus 5/32’s), now up 2/32’s. Be careful. Stocks are off 155 points on the big board. Interesting charts below on Gold and Oil. Both have broke their uptrend and look to be heading for a powerful correction.
PRIMELENDING/SVP- CAPITAL MARKETS
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