Stocks and bonds have been in relative lock-step for much of 2014 (stock prices and bond yields moving in same direction, aka 'stock lever'). The correlation had been on hold to a large degree over the past few sessions but made something of a comeback this morning when Treasuries came under selling pressure leading up to the 9:30am cash open for stocks.
Even then, we haven't seen enough to assume there's a causal relationship between the two in the short term. Perhaps the biggest reason for this is that markets are still getting back into the swing of things after the lowest volume day of the year yesterday. Big trades are still having an outsized impact on price/yield levels, and the whole affair is taking place in an inconsequentially narrow range very near the center of the longer-term range.
Further to the point of questionable correlations, bond markets have rallied since 11:40 while stocks have held steady. MBS are actually back to 'unchanged' and 10yr yields are only half a bp (0.005%) away.
MBS Pricing Snapshot
Pricing shown below is delayed, please note the timestamp at the bottom. Real time pricing
is available via MBS Live.
| MBS || |
96-20 : -0-02
100-23 : -0-01
104-01 : -0-01
| Treasuries || |
0.3993 : +0.0043
2.7242 : +0.0032
3.5177 : -0.0083
| Pricing as of 4/22/14 12:07PMEST |
Morning Reprice Alerts and Updates
9:36AM : Negative Bias Emerging as Participation Picks Up
9:07AM : Bond Markets Unchanged and Uninspired
Live Chat Featured Comments
Sung Kim : "Mortgage Banking
Mortgage closed loan production of $472,933,000 for the three months ended March 31, 2014 was flat when compared to the first quarter ended March 31, 2013. Operating income for the mortgage banking operations during the first quarter of 2014 decreased 91% to $991,000, when compared to $11,161,000 reported for the first quarter of 2013. Operating income in the first quarter of 2014 was negatively impacted by a more competitive mortgage lending market, resulting in reduced loan profitability. In addition, general and administrative expenses were higher due to increased staffing in response to increased mortgage regulations and expected higher loan volume."
Sung Kim : "we all talk about builder owned mortgage companies quite often, that is from NVR Inc.'s press release last night"
Ira Selwin : ""Chase's mortgage numbers reflect those of the industry: net income was $114 million, a decrease of $559 million from the prior year""
Ira Selwin : "Point being, they aren't the only ones"
Matthew Graham : "RTRS - US MARCH EXISTING HOME SALES 4.59 MLN UNIT ANNUAL RATE, LOWEST SINCE JULY 2012 (CONSENSUS 4.55 MLN), VS FEB 4.60 MLN (PREV 4.60 MLN)-NAR"
Matthew Graham : "RTRS- US MARCH INVENTORY OF HOMES FOR SALE 1.99 MLN UNITS; 5.2 MONTHS' WORTH, HIGHEST SINCE APRIL 2013"