MBS MID-DAY: Yields Firmly Into 1-Month Lows as Stocks Struggle

Posted To: MBS Commentary

The stock lever is VERY well-connected recently. That means, at any given moment, if equities are moving higher, bond yields tend to be doing the same (and vice versa). Each side has taken its turn as the lead dog at times, but certainly, it's bonds that are more keen to follow when stocks are on the precipice of a major technical cliff. The cliff in question rests on the recent lows for equities markets. Using the S&P as an example, today's losses bring it back in line with the late August lows seen during the China-inspired selling spree. A significant break below that would be the most negative move stocks have made since the Financial Crisis. That's the sort of thing that bond markets don't want to "miss out" on . By that, I mean that bonds know they'll...(read more)

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