This week is full of economic reports, with the big one being released on Wednesday with the conclusion of the FOMC meeting. Today, the bond market has $96 billion in auctions to work through, which could influence the market one way or the other. Investors will have plenty to sift through this last full trading week of the year.
The Empire State Index was well below expectations, but up slightly from last months 6 month low figure. Perhaps the low figure is helping stocks and bonds push higher, as the possibility of early tapering diminishes. The Dow jumped up 150 at the open, and mortgage bonds pushed higher as well. Bond prices held at support for the last 3 days, and are oversold from the move lower that started in October. Although we are hoping we found the bottom of the downward trend, there is still a lot of volatility in the market. To reduce interest rate exposure, we will maintain our locking recommendation.