MBS Day Ahead: Stocks and Bonds Confirm Hyperfocus on Covid Outlook

Posted To: MBS Commentary

Coronavirus has been with us for so long and has caused such a huge paradigm shift that it's easy to lose sight of its importance as a day-to-day market mover. Periodically we see moves that reinforce the importance ( like today ) where both stocks and bonds are unequivocally responding to vaccine headlines. The first headlines hit during the only hour of the day where both stocks and bonds are completely closed (5pm-6pm ET). When futures trading started at 6pm, both stocks and bonds jumped quickly higher with nothing else to blame but updated results from the Moderna Vaccine trial. Later in the overnight session, a story in The Lancet spoke favorably about a vaccine being developed at Oxford and slated to be produced by Astra Zeneca. Markets were clearly willing to respond. As we often…(read more)