The S&P is up over 100 bps this morning following Moderna’s phase 3 results. The drug company experienced over 94% effectiveness with their COVID vaccine. In addition, unlike the Pfizer vaccine which has to be stored at -90 degrees Fahrenheit, the Moderna vaccine appears to be distributed much easier as it can be stored at room temperature for a certain amount of time and at a regular refrigerator temperature otherwise. As discussed in previous commentary posts, advances in a COVID vaccine is one of the forces that hold the most weight over mortgage rates, we expect to see a rise at least in the short term.
Disregarding the jump in the stock market, mortgage backed securities are holding onto last weeks gains. Of course, this is partially due to the Fed continuing to buy up securities. We are holding a locking bias to take advantage of last weeks pricing even as the stock market rallies.