Sitting on the Edge of Our Chair

Good morning! With the entire country tuning into the live election results in a race that is way closer than almost any media outlet predicted, both the stock market and the bond market are up. We expect further volatility as the election results are announced.

Like we talked about on Monday – we got jobs this week. Unfortunately, jobs came in at about half of what was expected. 356k jobs were created taking the wind out of the sails of a rapidly recovering economy from the effects of COVID. The BLS jobs report will be coming out later this week. The BLS holds quite a bit more weight than the ADP; however, we hope that it does not come in with the same disappointing news. This low jobs report will put downward pressure on both the stock market and interest rates.

Mortgage backed securities shot up 45 bps this morning, touching the highs that we saw a couple of months ago. However, this jump is not reflected in most lenders pricing yet as they expect further volatility. We are holding a locking bias while waiting on election results.