Nothing like some good, old-fashioned 'stock lever' to restore one's faith in classic market paradigms. That's the one where traders "sell stocks, buy bonds," or vice versa. There was certainly plenty of stock selling today as S&P futures fell more than 40 points from Friday's close. In fact, it was the biggest day of S&P losses since 2011.
Up until the time that the pervasive weakness took over in stocks, bond markets were selling off. That doesn't mean they were in negative territory, just that they were heading that direction after a huge initial pop to the best levels in a week. Stocks were part of the overnight trend as well. S&P futures fell 40 points at the open and erased more than 20 points of that weakness by the time the NYSE open rolled around.
Shortly after the NYSE open, domestic investors increasingly moved into bonds as stock selling pressure was the dominant force. It clearly wasn't Euro-driven panic, considering the Euro ended at higher levels than Friday afternoon! That's certainly not the sort of move we'd expect to see from a currency that was imminently fearing for its existence.
MBS | FNMA 3.0 99-15 : +0-26 | FNMA 3.5 102-29 : +0-22 | FNMA 4.0 105-26 : +0-15 |
Treasuries | 2 YR 0.6370 : -0.0790 | 10 YR 2.3280 : -0.1464 | 30 YR 3.1010 : -0.1409 |
Pricing as of 6/29/15 5:30PMEST |