October 28th Mortgage Market Wrap-up

MBS prices are down -18/32 (FNMA 30-yr 6.0 at 99.72), far below the initial price level at -7/32. Unfavorable repricing took place. Today, the stock market surged, and the Dow gained almost 900 points to close above 9,000 (woo hoo!!!).   MBS and Treasury markets were hurt, as the primary movement in financial markets today was out of bonds and into stocks. The only economic data would seem more consistent with the opposite reaction, since October Consumer Confidence fell to a record low of 38.0, far below the consensus of 52.0. Readings below 100 indicate expectations of slower economic activity. Investors were looking ahead to tomorrow's FOMC meeting, and they have priced in a fifty basis point cut in the Fed Funds rate. The Fed's announcement will come out at 2:15 et. Before that, Durable Orders will be released at 8:30 et.