Market Commentary 10/11/19

Positive comments about trade negotiations with China from the White House on Thursday and Friday sent the equity markets on a tear at the expense of bonds. Rates rose as optimism for a trade deal increased. The markets seem to think at least a partial trade deal may be in the works this time. If a deal is inked, it will be an ongoing positive for stocks and will certainly push interest rates higher. 

Earlier in the week, the Fed Chairman spoke about his committee’s view on the economy. While the Fed sees the economy slowing, for the moment there are no signs of a recession on the horizon. The Fed reiterated it will do whatever necessary to keep the economic expansion going.

Mortgage rates have also risen this week. As we have written previously, our position continues to be that loans should be locked in when the 10-year Treasury is below 2.00%. We continue to hold this view, especially as the 10-year Treasury yield has moved off of 1.500% and is trading near 1.800%.