Bad news for Stocks means good news for Bonds.

After several days of the bond market getting severely pummelled, they are making a comeback today on some pretty nasty economic news.  First, jobless claims jumped to 406,000 last week.  This is much worse than expected, and the highest rate since March 2008.  Additionally, existing home sales were down, and inventory for existing homes was up.  Both of these combine to show that the economy and the housing market has yet to hit bottom (although I still believe that we are close).

On the stock market, Ford Motor Co. reported a loss of nearly $9 billion for the 2nd quarter.  This combined with a major bullish run on stocks over the last week has led investors taking profits and putting them over into bonds.  At the time of this post, mortgage bonds are up 34 basis points on the day.  They have moved decisively through one level of upside resistance, and are currently holding at a 2nd level of resistance.

This will help to recover some of the recent losses, but it may still be a good time to lock based on continued volitility in the markets before closing.