Good Monday Am on this very short Thanksgiving week.

The theme as always is being thankful, however this week in particular brings it to the forefront of our minds. We all have much to be thankful for and I hope you enjoy your time with friends and family.

There was some speculation that Biden would nominate Fed governor Lael Brainard to take over as Fed chair.  It was an outside possibility, but one that left some room for market movement when the uncertainty cleared up. As of this morning, the word is in.  Powell stays.  Bonds are modestly weaker as a result (Brainard is decidedly the more bond-friendly of the two).  The bond market’s more immediate concern will be the digestion of condensed Treasury auction schedule today and tomorrow. With that, the markets are pulling back considerably this morning, following a large gap down opening. It is rarely good when a market gaps down and then continues to fall. Not good! Hopefully at some point today or early tomorrow we will attempt to close this gap. The market does not like gaps and often attempts to close them. From there, the market either runs back down, or continues to climb strongly. The news this morning was light and consisted solely of Existing Home Sales, which beat expectations. Hopefully we hold here. If we hold here and bounce, we will have formed a higher low, which is a good sign. It is too soon to say. There is a slew of data being released on Wednesday, including the consumption numbers, which can have a huge impact on bonds. Let’s hope they remain tame. Rates are still very low and for each 100k in loan amount, .25 rate difference is $15/month. It is unimpactful.

I am going to keep today’s blog manageable and just include one graphic on the migration from California courtesy of the WSJ:

Please remain safe and healthy, happy Thanksgiving, make all of your days great.