Stocks, Treasuries, and Mortgage-Backed Securities(MBS) all showed significant losses today. Weaker than expected economic data was consistent with the decline in stocks, but Treasuries and MBS usually benefit from weak economic news. Bond markets continued to suffer for a second day after the Fed did not announce a definite plan to purchase Treasuries. December New Home Sales fell far more than expected to a record low level of 331K annual units. New Home Sales for 2008 dropped to the lowest level since 1982. The 5-yr Treasury auction received weaker than expected domestic demand, but foreign investors purchased a stronger than average 35% of the total. The House passed its version of the fiscal stimulus plan, and the Senate is expected to consider a different version next week. The Dow fell 200 points.
Tomorrow, GDP, Chicago PMI, and Consumer Sentiment will be released.
The Fed purchased $16.8 billion in agency MBS during the weekly period ending January 28, down from $19.0 billion the prior week.
Comments(0)