Daily Market Update

Mortgage Bonds have advanced in early trading on the heels of a speech by Fed Chairman Ben Bernanke.

Pending Home Sales for May were down -4.7%, a bit worse than estimates of -2.8%. However, the prior month's number was revised higher to 7.1% from the previously reported 6.3%. This report is not a big surprise, and indicates the housing market is not out of the woods just yet.

Alcoa, Inc. kicks off 2nd Qtr. earnings season today in what is expected to be a poor series of corporate earnings reports. Thomson Reuters is estimating 2nd Qtr. earnings have fallen by 11.1%, significantly worse than the 2% decline they predicted in April. If the Stock market continues to head lower on worse than expected earnings, we could see Bonds regain lost ground.

The market is very fickle, and can shift direction very quickly, as we have seen of late. There is also some overhead resistance to contend with - so for now we will Float.