Relief Bill Drags On

Good afternoon everybody!

The stock market is up this morning after the COVID vaccine rollout began this morning in the US.

Congress is on the hot seat as the task to create a bipartisan Covid relief bill drags on. They are pushing up against the Dec. 18 deadline to avoid another government shutdown. However, even if this deadline is met, many believe that unemployed people will not see relief until well into January or even February.

On Friday, mortgage backed securities were hovering above their 25 DMA. This morning, they dipped below that average and are now touching the line. This is the 7^th day that this floor has been a level of support for the MBS market. With such a strong support level, there is a lot of room to the upside before we MBS hit a ceiling. However, any good news regarding the vaccine rollout has the potential to push the stock market up and bonds down. We are holding a locking bias unless you are able to closely watch the market.