After modest overnight gains, bonds had been pulling back in the early part of the domestic session.  Treasuries and MBS were both nearly back to unchanged levels when equities markets took control of the momentum.

The "stock lever" isn't always a factor for bonds, but it has been increasingly prevalent of late, and tends to be more prevalent in general amid uncertainty.  And there is certainly uncertainty.

Stock futures trade almost all night, but the 9:30am open of cash trading brings additional liquidity and participation from a wider variety of traders.  It's not uncommon to see a more pronounced move in stocks around this time (including shortly before or after).  Such was the case today as stocks began selling off after the NYSE open.

This particular bout of stock market weakness goes a long way toward confirming a potential bigger picture shift.  After beginning the record-setting bull run in mid 2009, the only other downturn that's been remotely similar was in 2011.  Days like today make the current downturn look definitively worse.  Bonds are loving every minute of it.  On the following chart, 10yr yields are in yellow, German Bunds are in red, and S&P futures are in blue (not that it really matters since all the lines are right on top of each other).  The second chart is a longer term look at the S&P.

2015-9-28 stock lever


MBS Pricing Snapshot
Pricing shown below is delayed, please note the timestamp at the bottom. Real time pricing is available via MBS Live.
MBS
FNMA 3.0
100-31 : +0-09
FNMA 3.5
104-01 : +0-07
FNMA 4.0
106-16 : +0-04
Treasuries
2 YR
0.6840 : -0.0160
10 YR
2.1070 : -0.0588
30 YR
2.8840 : -0.0756
Pricing as of 9/28/15 12:19PMEST

Morning Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
9:16AM  :  After Modest Overnight Gains, Bonds Head Back Toward 'Unchanged'

Live Chat Featured Comments
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
Jason Harris  :  "Still crazy here....too crazy....need a slowdown....probably won't get it until snow starts falling"
Hugh W. Page  :  "Here on East Coast of Florida inventory still very tight. Desirable homes in desirable areas priced right go very quickly (days) with multiple offers not uncommon. Still a fair number of foreclosures though."
Bryce Schetselaar  :  "It seems like the homes that are priced to market in desirable areas dont last. Those pie in the sky prices or not desirable areas sit"
Victor Burek  :  "odd here...some areas, we still see bidding wars, others homes are sitting"
Jason Anker  :  "market still tight here"
Matthew Carver  :  "a very different story locally here in Tampa. Demand still outweighing inventory."
Sung Kim  :  "a lot more homes sitting on the market now here and offers well below list are being accepted"
Matthew Graham  :  "RTRS- U.S. AUG PENDING HOME SALES INDEX -1.4 PCT (CONSENSUS +0.4 PCT) TO 109.4 - NAR"
Sung Kim  :  "they never see them until after it happens"
Matthew Graham  :  "RTRS- DUDLEY: DON'T SEE HIGH FINANCIAL STABILITY RISKS AT MOMENT"
Matthew Graham  :  "RTRS- DUDLEY SAYS OCTOBER FOMC IS A 'LIVE' MEETING"
Matthew Graham  :  "RTRS- US AUG PERSONAL INCOME +0.3 PCT (CONS +0.4 PCT) VS JULY +0.5 PCT (PREV +0.4 PCT)"
Matthew Graham  :  "RTRS - US AUG PERSONAL SPENDING +0.4 PCT (CONSENSUS +0.3 PCT) VS JULY +0.4 PCT (PREV +0.3 PCT)"
Sung Kim  :  "it's the US Fed vs. all other central banks, something going to give"
John Tassios  :  "They are all Academics SK. The past textbook formulas for monetary policy does not work in today's changed biz world."
Sung Kim  :  "just like every one of her predecessors, Yellen fails to see the forest through the trees"