03 Jun Cautious Floating
Markets opened the 1st business day of June with stocks positive and mortgage bonds lower. However, that changed quickly after the ISM Index came in lower than the 50 mark, which indicates contraction. This helped push bonds into positive territory, and stocks indexes flat to slightly negative. The economic report calendar has a busy week starting Wednesday with ADP, Initial Jobless Claims on Thursday, and the big monthly jobs report on Friday. Friday’s jobs report has become all that more important, especially after Ben Bernanke’s comments on both sides of the argument of QE3. It’s likely that good news, or a stellar hiring figure, will actually be bad news to investors. mortgage bonds have been trying to establish support at the current price levels within the last 4 trading days. We will start today with a cautious floating bias as we hope the rapid trend of increasing rates has stalled.