Stocks put in another day of gains today.  This is important for 2 reasons.  First, they--and by "they," I mean the S&P and S&P futures, which is the closest thing we have to an archetypal representative (like Treasuries are for bond markets)--ended yesterday's session right on an important technical ceiling that had, thus far, prevented a bounce back from the late August sell-off.  It's also important because stocks and bond yields have been quite correlated of late.

In other words, an 'up day' in stocks ran the risk of putting upward pressure on rates.  Instead, rates held their ground for a 2nd straight day.  Once again, this was more true for mortgage rates specifically as Treasuries lost a bit of ground.  The MBS outperformance can be explained as easily as you'd like it to be.  On the easy end of the spectrum, we can simply say MBS almost always perform a lesser shadow of the same movement seen in Treasuries.  On the more complicated side, we could point out the day's big corporate bond offering from Goldman ($5 bln total).

What we can't explain just yet is the divergence between stocks and bonds.  It's small enough for now to avoid demanding an explanation, but that will cease to be the case if stocks continue making gain next week.


MBS Pricing Snapshot
Pricing shown below is delayed, please note the timestamp at the bottom. Real time pricing is available via MBS Live.
MBS
FNMA 3.0
101-19 : -0-02
FNMA 3.5
104-14 : -0-01
FNMA 4.0
106-22 : -0-01
Treasuries
2 YR
0.6130 : +0.0120
10 YR
2.0350 : +0.0160
30 YR
2.8840 : +0.0190
Pricing as of 10/16/15 7:19PMEST

Today's Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
11:44AM  :  ALERT ISSUED: Edging Toward Negative Reprice Risk
9:43AM  :  Holding Ground After Industrial Production Hits Forecast

MBS Live Chat Highlights
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
Oliver Orlicki  :  "Witty chat today for a Friday"
S John Murray  :  "But on conv a 620-659 monlthly mi factor is 1.69 not to mention pricing hits and on FHA you can often cover upfront MIP and still reduce rate by .25%-.50% over conv rate with FICO hits"
Matthew Graham  :  "yeah Bryce, but when rates get into the 3's in conv, FHA loses some luster as the origination volume gets compressed into the 3.0 coupons (i.e. FHA runs into that "3.25% and no lower" problem). If there was 2.5 liquidity, it would be a different story."
Bryce Schetselaar  :  "but FHA has lower rates and much more lender credit due to no g fees. Have to take that into account as well"
Spencer Packer  :  "At 95% LTV and only paying a minimum monthly payment it really has a long break even. Monthly MI probably wouldnt go away fro 8 - 9 years. Then you have the payments after that chipping away at the monthly savings. I've calculated break evens that are out over 15 years."
Compliance is Watching Me  :  "so here's a question. If I have borrowers over a certain credit score (usually 740-760) the rate for BPMI and LPMI is the same. Which one should the borrower use? I ask this because I don't do much conventional business...."
Ted Rood  :  "TRID trivia question: How are you guys proving CD receipt for non-borrowing title holders? I just heard we default to the mail rule in that situation, meaning closings will be delayed for loans with title holders who are not borrowers."
Oliver Orlicki  :  "Most of the top producers in the country say it is the single best thing they have done to their business.....well beside having a subscription to MND"