The Dow has continued upward today led by Financials, Google, Amazon, and Ebay, currently up over 250 points. Most are attributing this to several factors:
1. Fed Vice Chairman Donald Kohn suggested the possibility of future rate cuts in a Speech to the Council on Foreign Relations.
2. Oil is lower
3. The market had sold off to such an extent that many saw the dip under 13k as a buying signal, hence the back to back up days
What's interesting is that the power of the above 3 factors is overwhelming some normally important indicators that affect bond prices. Durable Goods report was much more negative than anticipated, normally good news for bonds. Though this has helped to offset some increase in bond yields today, the immense strength of the Dow has squeezed some money out of the bond market. As a result, Yields are up today, but thankfully, not as much as they would normally be considering a 250+ pt Dow improvement.
The 10 year yeild is currently at 4.02
The best surprise of all is that the FNMA 30 year fixed MBS is relatively unchanged, currently BETTER by 2/32nds.
So even though the Dow is WAY up and the 10 year yield is climbing too, mortgage rates have stayed relatively unchanged thanks to the week Durable Goods data and a continued influx of negative information about the housing market.