Good Tuesday AM,

Stocks pulling back a bit (and I mean a small bit) with the Dow down 170. The other averages are following suit, marginally down. I suspect it has more to do with some profit taking than any concern over surging Covid cases (cases have been hitting record numbers for weeks now). The retail sales numbers were poor which is likely helping bonds a bit as well. Stocks hated the drop in retail sales and bonds love it. The pull back in stocks is giving Mortgage Back Securities and the ten-year an opportunity for a nice bounce. The 10-yr is back at .88 and mortgage bonds are +20bps. So with regard to the lock/float question, the volatility suggests we lock however today, we are trading above some important moving averages. If you float, keep an eye on .90 on the 10-yr.  If we close above that .90, it is time to lock.

Please remain safe and healthy, make today great.