Market Snapshot August 9, 2019
Good Morning on this Fantastic Friday
Stocks back in the red and not much happening with bonds. I think markets are tired of volatility for the week and are happy to go out with a whimper and do it all again next week. The PPI (Producer Price Index) data out today was important and also weak. Markets kind of nodding to it but not really reacting. China weakened their Yuan again and President Trump signaled no deal on trade. These are likely the culprits for the slide in stocks. By the numbers it looks like a good week for rates as the 10-yr started the week at 1.77% and is likely to end around 1.70%. Unfortunately there has been a bit of a decoupling between the 10-yr and mortgage bonds for the minute. I am confident it will all come back together soon. The positive spin is that mortgage bonds have not seen the same improvement and the 10-yr has so if the 10-yr were to fail, in theory, mortgage bonds wouldn’t feel the same amount of pain.
Not a bad idea to lock going into the weekend but I don’t think there is much to worry about right now in either direction (unless Mr. Trump is on his twitter account this weekend). There is data out on Monday.
Enjoy the weekend and make today great!