Good Tuesday AM,

It started as a yucky day in the bond market. The 10-yr under pressure as there is more chatter about better data, a quicker recovery, and rising inflation. The 10-yr popped up to .71% (we were at .62% at the end of last week). It’s not that those 9bps make a real difference, but if we were to break above .74/.75, we enter into a new trading channel and that becomes a little more problematic. I am not at this point too concerned, as despite inflation being kryptonite to the bond market, I just don’t see it. Any improvement is based on the dismal first (and majority of the second) quarter. Yes we are recovering, but as I have included a link below (from CNN and Moody’s) to a really great piece with relevant infographics, which I would recommend at least taking a look at if not studying (as me, being nerdy, does), nationally (and for most states) we are nowhere close to economic output we had just 6 months ago.  More on this in a moment. Mortgage bonds are on sale as well and currently down 13bps. Again, not a ton but we are now below support, which now of course becomes resistance on the way back up. Despite all of this, the message is not much different. Rates are incredibly  low. Act now. Despite sales prices increasing (year over year they are up 6% nationally), the average mortgage payment is 13% less. Yes, 13% less despite the increase in prices. Yes, act now.

As mentioned a bit above, “CNN Business and Moody’s Analytics have partnered to create a Back-to-Normal Index. The index shows which states are closest to and furthest from returning to their pre-pandemic economies. We’re coming up on six months since Covid-19 turned the world upside down. We are adjusting, but few things feel normal. Certainly not in our daily lives. Most of us are wearing masks and social distancing, while our favorite sports teams play in empty stadiums and arenas. Our work lives are hardly typical, either. Lots of us are unemployed, and many of us fortunate to have jobs continue to work from home. How far from normal are we? And how much progress are we making toward whatever “normal” will mean in the future? These are tough questions, but CNN Business and Moody’s Analytics have teamed up to take a crack at answering them with regard to the economy. How close to normal is your state? Click here to explore the index The US economy remains far from normal. That’s the bottom line. Based on the Back-to-Normal Index that we constructed, the US economy was operating at only 78% of normal as of August 19. “Normal” for our purpose is the economy as it stood prior to when the pandemic struck in early March. Economic activity nationwide is down by almost one-fourth from its pre-pandemic level — far from normal.”

Please remain safe and stay healthy, make today great!