Advising a cautious floating

Markets opened with mortgage bonds moving slightly higher.  Stocks are lower and continue to wait for Washington to come to an agreement to keep us from falling off the “Fiscal Cliff” before the new year begins.  There is no expectation of any progress for today, since Congress does not return until tomorrow.  The Case Shiller report showed that home prices continue to increase and that the housing market is trying to maintain a recovery.  We will advise a cautious floating bias, as bond prices are maintaining their positive momentum.