Good Tuesday AM,

Today is a shaping up to be a bit of a pause in the markets. Stocks giving up some of yesterday’s big gains and bonds are mildly improved. The 10-yr is at 1.41% (I haven’t called that out for some time, so thought it was good to set the placeholder). If we can crack 1.38%, bonds have a good chance to run and rates drop another .125%. Rates appear that they found bottom on Thursday but it is too soon to know for sure. Bottom is choppy and the markets never move up in a linear fashion, so be prepared for that. Right now, markets are waiting to hear from the Fed (several speakers this week) as well as the jobs report on Friday.

Dan Rawitch shared “I predict some Fed action very soon, perhaps prior to the mid-month Fed meeting. I also predict that Fed brings back operation twist from ten years ago. This allows them to sell short term treasuries and buy long term treasuries. This accomplishes three things. It lowers long term rates, calms the stock market so the giant bubble they created does not burst, and it raises short term rates which is good for the banking system. Let’s hope I am right.”

I would continue to recommend locking as pricing is improving. It is hard to lock when it is going the other way.

Please remain safe and healthy, make today great!