Market Snapshot February 8, 2019

snowfall2

Good Friday A.M.,

 

Very short today as there is no data to speak of. Global economic and trade-war concerns continue and  additional reports on the gap between any trade agreement discussions with the U.S and China continue to keep markets in a risk off bias. The continued safe-haven move to bonds this morning have driven the 10-year yield down to 2.63%, mortgage bonds +12bps and the Dow is down over 200 points. The 10-year yield is trading back to mid-January 2018 levels and mortgage rates are around same levels as one year ago. Things could get dicey in here, as the global economic slowdown we are seeing take shape in Europe (Italy and Germany to be specific) if it continues, will undoubtedly spread across that region and into the US. Hopefully the ECB will step up and spur growth. I am starting to see some outlier predictions for the US 10-yr note yield to drop below 2% sometime this year. That is both bold and unexpected. The positive part of that is rates would drop another .5% -.75% (and spur another refi boom), the negative side is of course, how poorly the economic outlook would have to be to get there. That will likely be my food for thought this weekend.

 

Have a terrific weekend and first, make today great!