After spending the majority of the session in a stable range yesterday, prices of mortgage backed securities lost their steadiness and ticked lower heading into the close forcing most lenders to re-price for the worse, increasing mortgage rates. The bond market sell off was a factor of the stock market moving higher as traders set up for better than expected Goldman Sachs earnings. This morning those expectations were confirmed as Goldman reported Q2 diluted earnings per share of $4.93, easily beating forecasts. Later in the week JP Morgan Chase, Bank of America, and Citi will report earnings, look for the market to buy the rumor, and sell the news...meaning earnings reports will likely be priced into the market before they are released which will make for some illogical price movements following earnings posts.
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