Market Commentary – 5/1/15

Both U.S. bond and stock markets remain volatile with the ten year treasury hovering around 2.11% above the psychological 2% mark.

On Wednesday morning, The Gross Domestic Product (GDP) numbers came in well below expectations (.2% versus the 2.2% recorded in 2014). GDP is an important economic indicator as it measures the value of the production of goods and services in the U.S., adjusted for price changes.

While the GDP numbers were soft, Friday morning Consumer Sentiment came in red hot recording the 2nd highest reading in more than eight years. U.S. Bond yields traded higher on this strong number.

From a global perspective, U.S. bonds are also affected by what happens in other parts of the world. With the rise in Euro and German yields from ultra-low levels , U.S. bonds continue sell off increasing yields on bonds and mortgages. Therefore, we are biased toward locking in interest rates.