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MBS Day Ahead: Deep Thoughts on The Nature of Market Movement

Posted To: MBS Commentary

For too long and, to this day, far too frequently in many circles, market movement is credited to or blamed on oversimplified "cause and effect" relationships. I'm talking about the sort of basic binary conclusions such as the following: Stocks slide as stimulus hits a snag Bonds rally after weaker jobs report Bonds slide after stronger <insert inconsequential data here> Now… I say "inconsequential" in the last bullet point above, but that's a bit too harsh in many cases (but perfectly accurate in others). A few of the reports that almost always STILL have the power to give bond markets a nudge, even in this post-covid economy: Any of the PMI reports, both ISM and IHS/Markit Manufacturing and Non-Manufacturing Jobs Report (NFP) Retail Sales But even then…(read more)

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