Bonds, notes, mortgage backs, and stocks are all trading in the red. Stocks off only 3 points as they have come back from much worse levels. The Naz has gone positive. Stock market gyrations have put pressure on notes and mortgage backs. Currently, the 10 year note is off 6/32’s (yield 3.22) and mortgage backs are a mirror image, down 6/32’s as well.
Big week for news with Existing Home Sales out this morning. The print of plus 7.6% looks good headline but when you dig into the details, you’ll see inventories jumped to 8.4 months and 49% of the sales were first time home buyers. Something to watch in the future.
Spain took over one of their banks today. The 146 year old institution had too much bad real estate debt. Hummmmm. Technically, the market is consolidating to relieve over-bought conditions and put the chart back into harmony. We do not see a Katie bar the door reversal, just a trade to let everything catch up. Watch stocks, they are in the driver’s seat.
