Markets are starting the last full trading day of the year with stocks and bonds in the red. The Dow is off by 100 plus points, the Nasdaq off by 36 and below 9000, and the S&P 500 down by 10 points. Mortgage bonds are off as well but remain within the trading range they been stuck in since early September. This week is expected to be similar to last week with low volume and exaggerated moves, so any moves one way or the other should be put into perspective.
On the economic report schedule today, we saw the Chicago PMI beat expectations and Pending Home Sales for November came in right on target. The Case Schiller Housing report and Consumer Confidence are on the schedule for tomorrow morning, with the markets closing early at 2 pm EST.
Given the low trading volume and the short holiday week for the markets, we don’t expect anything market moving before next week when its business as usual. Therefore, we will maintain a locking bias.