Good Monday A.M.,

Stocks on fire again this a.m. I sound like a broken record. When will this end? I guess it ends when the Fed starts pulling chairs away from the musical chair game which is keeping rates low and financing costs down. It does not take a lot of bandwidth in the executive suite to figure that with yields being inflation adjusted negative, you should borrow as much money as you can. Today’s big news was the results from a new Vaccine Trial run by Moderna. These results show the vaccine is 94.5% effective at preventing Covid. This is absolutely fantastic news. Now we just need these vaccines to be approved by the FDA and for the companies to produce enough to inoculate the world. That should only take about 2 yrs. In the meantime, cases are surging across the country. States are closing down businesses yet again and I suspect it will take until 2021 before we see new infections decrease to a manageable number. With that, Mortgage Back Securities are up on the day and are outperforming the 10-yr note which is stuck in the mud at .90%.  nearing the top of the range. Bonds in general are oversold and rates should move back in the right direction, but it is volatile. This is a fairly big news week with lots of opportunity to get whipped around.

Please remain safe and healthy, make today great!