Good Morning on this Terrific Tuesday, last day of June and Q2,

Recognizing it is never a straight line up or down, and in the face of just ridiculous movement in equities, bonds are doing really well. The 10-yr today is at .65 and mortgage bonds are off to use a very technical term, a smidge. Mortgage bonds are teetering on a line of support/resistance. Going a little technical here for a moment, but the FNMA 2.5% coupon is currently trading 2 bps below that line in the sand. We need to close above it for rates to continue lower. Stocks continue to stay in the green, although not by much today. The focus is clearly back on the virus and how impactful it will continue to be to the economy.  Early reports are that (and I am not sure if this is a second wave or just an extension of the first wave), but many states have retreated on their re-opening guidance and timelines. That cannot be good for economic output. With the unemployment benefits and bonus scheduled to run out in July and Mr. Trump down in the polls, I am pretty sure we will start hearing about unemployment extensions right after the holiday. It makes sense both socially and politically, and possibly economically, but the concern is who is going to pay for it. More on that as it becomes reality. In the meantime, rates continue to be at their lowest (almost) ever and this is the perfect time to buy a home. For those waiting for some drop in value, I just don’t see that happening in at least the next 12 months (why would there be a glut of houses on the market when people don’t currently have to make a payment… if they sell, they will need to pay the new rent or mortgage?).

Closing with some good news on housing with a pretty picture from the WSJ.

Pending home sales (contracts) rebounded sharply in May, topping economists’ forecasts.

• The pending sales index:

Please remain safe and healthy and make today great!