Today, the University of Michigan Consumer Sentiment Index improved strongly to 83.7.  This index is generally volatile and tends to reflect sentiments from the equity markets and the cost of gas.  April leading indicators increased by 0.6%.

Russia's GDP increased , but the economy seems to be grinding to a halt in the face of a recession in the European area.  Most of the main global economies are weakening, but as long as the Fed and other central banks continue to maintain low interest rates, the stock markets are likely to continue improving.

Be on guard for any changes to the Fed's stimulus plan.  Unless there is a major change with economic outlooks and data to support it, the global equity markets may see a major reversal.

The interest markets had a nice day yesterday, but the bond market remains very volatile.  Yesterdays improvement was a momentary reaction to the current "oversold status".  So far, no follow through of any significance from the one day rally has been realized.  The economy remains to be a picture of uncertainty, with reports from various Federal districts coming in softer than expected.

Early this morning, rates remained unchanged from yesterdays close, but have since been hit by one negative adjustment.

OUTLOOK:  The 10 yr. Note must close below 1.80% before any change will be realized.  There is a likelihood that the bond and mortgage markets will tighten up in the near-term.  Expectations are for the 10 yr. and MSB's to slow down while investors and traders regroup and reassess the recent spikes.

In all likelihood, mortgage rates should remain relatively unchanged for the next week or so.

- Michael Corboy