Good Morning. The world is upside down in more than one way today....

Not only did stocks sell off around the planet, the Flyers made it to the Stanley Cup finals. The F'ers will face the Chicago Blackhawks in what will likely be a slobber knocker of a series. I cannot wait to see Dustin Byfuglien and Chris Pronger square off!  Sorry Flyers followers...after being forced to listen to Philly fanatics argue with Pittsburgh's faithful for four straight years...I no longer have much love for either cities sports teams. Go Hawks! I'm sure the pit at the CBOT is bustling with excitement.

Here is a quick recap of overnight developments....

SHANGHAI: -1.90%
HANG SENG: -3.47%
TOPIX: -2.29%
NIKKEI: -3.06%
KOSPI: -2.75%
SENSEX: -2.71%
STRAITS: -2.69%
ASX: -2.96%
DAX: -2.66%
CAC -3.22%
FTSE: -2.56%

Get the point re: RED?

The stock lever is the originator's friend today. A global equity sell off has led to a flatter yield curve thanks to a flight to safety into risk free Treasuries. Lower TSY yields have helped push "rate sheet influential" MBS prices a few ticks higher.

The FN 4.0 is +0-15 at 99-26 and the FN 4.5 is +0-09 at 102-12. The secondary market current coupon is 5.2 basis points lower at 4.036%. While production MBS coupon prices are higher, they are lagging benchmarks badly. Current coupon yield spreads are as follows: +91.6 basis points over the 10yr TSY note and +83.4 basis points over the 10 year interest rate swap. 

LIBOR is higher again today...across the curve.

March S&P/Case Shiller Home Price data has been released....

20 City Index Unadjusted:  -0.5% vs. Consensus -0.4%  vs. Feb -0.9%
20 City Index Adjusted:  +0.0 pct vs. Consensus -0.3% vs. Feb -0.1%
10 City Index Unadjusted:  -0.4 pct vs -0.6 pct in Feb
10 City Index Adjusted:  +0.2 pct vs. Feb 

David M. Blitzer, Chairman of the Index Committee at S&P, says:

"It is especially disappointing that the improvement we saw in sales and starts in March did not find its way to home prices....Now that the tax incentive ended on April 30, we don't expect to see a boost in relative demand." 

While this is old news it will still add fuel to budding double dip debate in housing.

This data did nothing to reverse the risk averse bias in stocks. The flight to quality into government bonds rates should improve this morning. The S&P finds support around 1040 then 1026 then....well then 1000 is our next pivot.