Cautious Floating

Markets moved higher as JM Morgan and Wells Fargo both reported record profits.  Contributing to their recent success was their share of the estimated $450 billion of mortgage originations in the 3^rd quarter.  Consumer Sentiment was just released showing a 5 year high.  This makes you wonder if they just surveyed everyone in line to get their new Iphone 5…  PPI was reported and was close to what was expected, so there was no major market reaction.  mortgage bonds are moving up today after bouncing from the low end of the new trading range.  However, the last 2 Fridays have had prices reverse in the afternoon.  We will maintain a cautious floating bias with an awareness of the weekend selloffs.