Just a quick note as fast money selling has hit the bond pit. ISM Manufacturing Index (Institute for Supply Management), jumped to 56.3 versus expectations of a 53.0 print. This piece of data, coupled with strong manufacturing growth reported out of China and India last night, has turned bond traders short term bearish.
Currently, the 10 year note is down 37/32’s, the 30 year bond is off nearly 3 points, and mortgage backs (lower note rates) are off 22/32’s. Stocks love the news, up 243 points on the Dow. One report doesn’t turn the trend but at the same time, we have been warning about topping action and poor risk reward in gambling with this market. Time for Austin mortgage borrowers to get a little defensive, looking to Friday’s employment report for a little more economic clarity. Be careful out there.