Weak dollar, higher oil, new high in gold, stocks near unchanged, and bonds doing a little better. We’re feeling a bit like Bill Murray in “Groundhog Day”. Same trade just a new day. One memorable line from the movie;
(Phil) Do you know what today is?
(Rita) No, what?
(Phil) Today is tomorrow.
It happened. In a nut shell, what we have here is too much money chasing too few assets that are worth owning.
Given the Fed’s 0% interest rate pledge, money will continue to seek out the longer end of the curve (10 year notes through 30 year bonds), trying to avoid the misery of buying other assets that won’t let them sleep at night. Stocks have changes their spots, now trading like commodities, given the continued weakness in the dollar. Throw in a mixed bag of economic data and a seasonal supportive 4th quarter (for fixed income), it’s hard to see much of a change in Austin mortgage rates into year end.
No news today except for Consumer Credit which is expected to fall a bit as consumers seem to be repairing their own balance sheets. Currently, the 10 year note is up 11/32’s, in front of today’s 10 year note auction (yield 3.20%). Stocks are now off 44 points (as I began this missive they were near unchanged). Mortgage backs are up 2/32’s to 3/32’s on most coupons.