Mortgage Bonds are trading higher so far this morning, in reaction to continued weakness in the Stock market.
Adding to the negative sentiment in Stocks this morning are the poor earnings outlooks for Best Buy and Macy’s. These negative outlooks come right on the heels of Circuit City closing 150 stores. Suffice it to say, this holiday season doesn’t look good for retailers.
There are no economic reports due out today, but at 1 pm Eastern Time the Treasury is set to auction off $20B in 10-Year Notes. If this auction is not well received, it could temper the current rally in Bonds. For now, I recommend floating as I continue to monitor the direction of Stocks and the reaction of Bond prices.
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