Just when you think you’ve got the list covered:

  • Tarp,
  • TALF,
  • FOMC,
  • Corporate Earnings,
  • GM in and out of BK,
  • FOMC,
  • Treasury Auctions,
  • Bank Stress tests,
  • and Housing Data,

…someone gave us a new worry: Swine Flu.  Markets around the world have a heightened awareness of the disease, one which has claimed over 100 lives and effected many more.  Thoughts of how SARS took so many human lives and accumulated severe financial losses in Asia, etc., comes to mind.  The White House is concerned and so are the markets, sending stocks into the red and sparking a flight to quality bid in treasuries and MBS.

Currently, the 10 year note is up 16/32’s (yield 2.94%), mortgage backs up 9/32’s, and stocks down 71 points on the big board.  Just goes to show you that when you think all the animals are in the barn, the pigs sneak out and make a mess.

No news today but the week ahead will provide for high anxiety and volatility.  Housing data via the Chase Shiller Index, Consumer Confidence, and the start of the FOMC meeting tomorrow.  Conclusion of FOMC meeting on Wednesday with any change and/or policy statement due at 1:15 pm cst along with the Treasury Refunding Announcement (8:00 am cst).  Thursday’s usual subjects will be Weekly Unemployment Claims, Employment Cost Index, Personal Income and Outlays, Chicago Purchasing Managers Report, and the ISM report of Milwaukee.  Friday, will not only be the first day of May, it will release Factory Orders, ISM Index, and Domestic Vehicle Sales for April.  For the technical trade, other than the chart looking drunk, we have come back towards neutral as neither bear nor bull can get control.

Given the cross currents, the market look likely to balance both economic and humanitarian issues, allowing mortgage pricing to hold steady or improve just a little.  More on the FOMC tomorrow.