Even a slew of corporate bond issuance isn't holding back bond markets from another strong move lower in yield today.  In fact, in a break from the recent norm, we've seen bond yields MORE willing to move lower than stock prices.  2 weeks ago heading into the NFP rally, the opposite was true as bonds were seemingly being dragged lower in yield against their will.

There will always be more than one factor in play at any given time, but the recent rally has been as much about stocks as anything.  If investors don't have their heads in the sand, there's a good chance they're wondering where exactly the next wave of stock market gains will come from--the kind that had previously been delivered by various rounds of QE either at home or abroad. 

From there, if stock gains are looking like they've reached the end of an era, bonds get pretty excited.  We've talked a lot about how the current stock weakness has already made a more forceful case than its only real precedent in 2011.  Now this week we see stocks continue to struggle with the top of that "do or die" range.  This refers to the narrow range that follows a sell-off, that ultimately leads to a break higher and the resumption of the long-term rally.  Bottom line, no break higher yet, and the longer that continues to be the case, the more bond markets know they're gonna win.

2015-10-14 stocks

Of course it's not as as simple as bonds winning and stocks losing, but there are tradeflow considerations as money managers allocate assets out of stocks and into "whatever else."  Bonds are increasingly fitting the "whatever else" bill as the global economy increasingly makes a Fed rate hike seem less scary/immediate.


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
101-24 : +0-13
FNMA 3.5
104-19 : +0-10
FNMA 4.0
106-24 : +0-06
Treasuries
2 YR
0.5570 : -0.0600
10 YR
1.9820 : -0.0600
30 YR
2.8390 : -0.0420
Pricing as of 10/14/15 2:34PMEST

Morning Reprice Alerts and Updates
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11:03AM  :  Bonds Keenly Aware of Stocks; 10yr Briefly Sub 2%

Live Chat Featured Comments
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
Victor Burek  :  "that will probably be revised lower again"
Victor Burek  :  "The GDPNow model nowcast for real GDP growth (seasonally adjusted annual rate) in the third quarter of 2015 is 1.0 percent on October 9, down from 1.1 percent on October 6."
Victor Burek  :  "its transitory mg"
Matthew Graham  :  "+0.8 vs +1.2 Core PPI y/y. Wow..."
Matthew Graham  :  "RTRS - U.S. SEPT YEAR-OVER-YEAR PPI FINAL DEMAND -1.1 PCT (CONS. -0.7 PCT), EX FOOD/ENERGY +0.8 PCT (CONS. +1.2 PCT)"
Matthew Graham  :  "RTRS - U.S. SEPT PPI FOR FINAL DEMAND -0.5 PCT (CONSENSUS -0.2 PCT) VS AUG UNCHANGED"
Matthew Graham  :  "RTRS - US SEPT RETAIL SALES +0.1 PCT (CONSENSUS +0.2 PCT) VS AUG UNCHANGED (PREV +0.2 PCT)"
Matthew Graham  :  "RTRS - WELLS FARGO & CO SAYS DURING THE THIRD QUARTER, RESIDENTIAL MORTGAGE ORIGINATIONS WERE $55 BILLION, DOWN $7 BILLION LINKED QUARTER"
Matthew Graham  :  "RTRS - WELLS FARGO & CO QTRLY MORTGAGE BANKING NONINTEREST INCOME WAS $1.6 BILLION, DOWN $116 MILLION FROM SECOND QUARTER"
Matthew Graham  :  "RTRS - WELLS FARGO & CO SAYS DURING THE THIRD QUARTER, RESIDENTIAL MORTGAGE ORIGINATIONS WERE $55 BILLION, DOWN $7 BILLION LINKED QUARTER"