How Much Deeper Can We Go?

The market is hanging deep in its hole but has at least stopped digging. The weekend is thankfully approaching and trade is wondering just how many more things can be thrown its way come Monday morning and how it wants to be positioned. It has paid off to be long the flight-to-quality trade and given Paulson’s less-than detailed press conference, the dip buyers may yet be inclined to shore up prices at the lows.

The 10-yr yield hovers around the pivotal 3.76% level with a close below keeping bonds in the game but severely scrambled.  With the Dow, NASDAQ & S&P raring upwards, Treasuries and Agency MBS’s are taking the brunt of the blow as investors move safe harbor capital off the sidelines to deploy them back in the stock market.  As a result, Agency MBS pricing is off a full point as is GNMA (FHA) MBS.  Wow, what a week it was.

Bookmark It

Hide Sites