The S&P had been idling in place with prices between 2560 and 2600 for more than a week.  During that week, we've discussed the risks associated with a break above 2600.  Simply put, if stocks managed to break above their nearest notable technical ceiling, perhaps bonds would do the same.  In that case, we were looking at yields of 2.75% as the correlated ceiling.

Now today, the S&P closed at 2610 and 10yr Treasury yields not even above 2.72%.  To be fair, when stocks broke that ceiling this morning, bonds definitely came along for the ride.  But everything played out on a smaller scale, as if both sides of the market were suppressed by some larger uncertainty.

While there were quite a few brexit-related headlines in the news, we'd be far better served by focusing our attention on the government shutdown as the source of uncertainty.  It's arguably helping keep any underlying stock market bullishness under wraps and at the same time preventing bonds from losing their cool.  

One of the issues stemming from the shutdown is the unavailability of quite a bit of economic data.  We saw some evidence of that this morning as bonds reacted to data that doesn't normally move the needle, simply because they don't have much else to go on.  While it's true that NFP should remain intact (that department is funded), markets aren't accustomed to building trade strategies around an incomplete economic picture.   This is especially important at a time where Fed policy is in a state of flux depending on the realities of the data (the data that's not all  currently available!).

MBS Pricing Snapshot
Pricing shown below is delayed, please note the timestamp at the bottom. Real time pricing is available via MBS Live.
FNMA 4.0
101-29 : -0-01
10 YR
2.7180 : +0.0080
Pricing as of 1/15/19 6:30PMEST

Today's Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
11:58AM  :  ALERT ISSUED: Negative Reprices Becoming More Likely
10:45AM  :  ALERT ISSUED: Gains Erased; Negative Reprice Risk Increasing
8:57AM  :  No Major Reaction to Econ Data (Minor Reaction? Yes!)

MBS Live Chat Highlights
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
Tim Robinson  :  "I never knew about the market newsletters. Pretty darn slick. I just set it up. Can't wait for the flood of referrals on Thursday when it goes out. All kidding aside, it is pretty cool, and super easy to set up. Thanks MG, oh and Ted too for the suggestion."
Hugh W. Page  :  "Funny you should mention that TR. Same here. Just got an app from an ex-realtor and his wife who were still getting the newsletter."
Ted Rood  :  "Just a quick public service reminder for Market Newsletters. I just got a call from client I last worked with 4 years ago, wanting to get preapproved for a new purchase. He mentioned that he thought of me, in part, because of my excellent weekly newsletter!"

Economic Calendar
Time Event Period Actual Forecast Prior
Tuesday, Jan 15
8:30 Producer Prices (%) Dec -0.2 -0.1 0.1
8:30 NY Fed Manufacturing Jan 3.9 10.75 10.90
8:30 Core Producer Prices YY (%)* Dec 2.7 2.9 2.7
Wednesday, Jan 16
7:00 MBA Purchase Index w/e 255.2
7:00 Mortgage Refinance Index w/e 987.9
10:00 NAHB housing market indx Jan 56 56