Like a true natures child, the market was born, born to be wild.
Great lyrics and certainly fits the markets of late. With the environment for mortgage pricing so helter skelter, one must move quickly to have a chance. Take for example, the move just a month ago on the FOMC announcement. Since that time, pricing is off 1 point. Economic dynamics haven’t changed, just the perception of where the economy currently is, the potency of the prescription give by the Fed and White House, and what impact the banking crisis will have on the future.
Traders call times like this, “not being married to a trade.” In other words, they have little to no conviction. It seems to us that the economy needs to stabilize before it can recover and start any type of normalization process. In the mean time, “wild” trading will be in vogue. The week ahead will be on the slow side with FOMC minutes of the last meeting tomorrow, Wholesale Trade on Wednesday, Weekly Claims, International Trade, Import Prices on Thursday (along with an early close 1:00 pm cst). We’ll end the week with Good Friday as all major stateside markets are closed along with PrimeLending Austin Mortgage.
Currently, the roller coaster ride we’ve been on looks a little better. Mortgage backs are plus 4/32’s, the 10 year note is up 3/32’s (yield 2.90%), and stocks are giving a little ground, down 140 something on the big board. Overall, we’ll call the market neutral and expect more of the same (sideways trading) as the weeks moves on.