MBS RECAP: Bonds Rally as Stocks Stall

Posted To: MBS Commentary

Salient, easily-identifiable motivations for bond market movements continue to be elusive. The times of the day where liquidity (numbers of buyers and sellers) shifts gears continue to see the lion’s share of activity. Trading has been easier to understand on a broad, thematic level. Today’s theme is similar to yesterday’s: investors are a bit uncertain and a bit cautious . Everyone’s best guess seems to be that “politics!” is the key motivation (i.e. challenges facing some of the new administration’s first actions as well as overseas election uncertainty/implications). The “uncertainty theme” is reflected in overnight bond market gains as well as stocks stalling at the NYSE Open (and finishing weaker). As stocks fell throughout the day, bond yields moved…(read more)

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