Tuesday 7/1/08 ... Finished Down

Here's the down day I've been saying would happen some time soon.  8 ticks down on the day to 100-20.  What is perhaps even more disturbing is the trend in weakness on the part of MBS today.  Spreads were weak all day long after the open,  The ninja reports that investors taste for spread product in general is sour currently with the return of headline risk and a flailing stock market.  In other words, the FTQ (flight to quality) bid doesn't perceive enough of the "Q" in mbs, so treasuries are getting the bid.  Even treasuries collapsed under the weight of only a moderately positive DJIA today.

The rest of the week, all two days of it, will be heavily dependent on data.  If you didn't lock on today's reprice info, all we can really hope for are more weak economic reports.