Both stocks and bonds are down this morning

Both stocks and bonds are down this morning, as the bond market is again flirting with the 200 day moving average.  It seems investors are waiting for Friday when the Non-Farm Payroll Report will be released.  Should that report be stronger than anticipated, a decisive break below the 200 DMA would be likely.  However, if the report is weak, that may be all that is needed for bonds to make a move higher and push interest rates lower.

Given the current support of the 200 and 25 DMA, we are hopeful rates will at least hold.  However, these levels must be closely watched.  Given the demand of mortgage bonds being soaked up by the Fed via quantitative easing combined with a shrinking supply of closed mortgage loans on the market, there will be continued pressure to push mortgage rates lower.  We will closely watch the reports as they are released this week and keep you posted.  In the meantime, those who don’t feel like taking a risk should lock in while rates are near multi-month lows.