Monday, stocks opened the 4th quarter with their worst opening day performance since 1998. Everything seemed okay until mid-morning when bond prices began to run and stocks gave in to the uncertainty coming from Europe. The euro zone finance ministers did not approve the next round of bailout money for Greece, delaying the decision on the $10.7 billion payment until sometime after October 13.
Also helping the U.S. Treasury market was the Fed, which made their first "operation twist" purchases yesterday, buying over $2 billion in longer long maturities. The 30 year bond has rallied from 3.30% before the Fed announced operation twist to 2.76% this morning, although bonds have retreated as the day wears on. Mortgages are not performing well today as they are worse in by price by just over .375%.
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