04 Dec Cautious Floating
Stocks and bonds are both close to flat at the open, as there are no economic reports on the calendar for today. The Fiscal Cliff continues to keep investors, companies, states, and citizens paralyzed in terms of how a lack of resolution will affect the country. In addition to any Fiscal Cliff update, markets are looking to tomorrow’s ADSP report and Friday’s monthly Jobs Report as the catalyst to move one way or the other. mortgage bonds are holding slightly to the positive side for now, but a wedge has formed that started in September. Prices continue to trade within a tighter formation and often result in a strong breakout one way or the other. With the Fed buying mortgage bonds, it supports the argument that rates will not move too high anytime soon. We will maintain a cautious floating bias for now.