18 Oct Locking Stance
Initial Jobless Claims were reported at 388,000, which was above estimates of 360,000. Apparently, there was no clear explanation for last week’s unexpectedly low number of 339,000. It was revised to 342,000. Nevertheless, traders are going with the good news, which was the Philly Fed index manufacturing report. The report came in well above expectations, turning stocks positive after the announcement. The Dow has seen 5 positive days in a row and looks destined to visit the 14,000 mark again. All this in spite of the current economic environment… mortgage bonds have seen a 100 plus basis point drop in the last 5 days, pushing interest rates off of their all-time lows. It is a volatile environment, but it may be the course that the Fed is allowing due to all the new loans entering the market from the last big wave of refinances. We shifted to a locking stance yesterday mid-day and are continuing that stance today.