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move-index-how-bond-market-volatility-can-help-investors-spot-stock-trends
- When the MOVE Index spikes, that added volatility premium means risky bonds sometimes get priced lower, boosting yields.
- A Higher MOVE Equals Costlier Mortgages, A More Strained Consumer
- The MOVE Index also has vital implications for the domestic mortgage market. High rate vol makes a typical 30-year mortgage more costly as lenders price-up home loans.
- Historically, the spread between the average 30-year fixed-rate mortgage and the U.S. 10-year Treasury is about 1.9 percentage points. As of Friday, according to Mortgage News Daily and the U.S. Treasury, that difference stood at a massive 2.76%.
- More expensive home loans further strain an already unhappy consumer, potentially damaging future consumption.
The Bottom Line
Keep your eye on the MOVE Index and credit spreads. These are important indicators that might determine where stocks head. If rate volatility and yield spreads ease, that could further support an equity market rally.
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Comments
@yogibearbull uses MOVE among other, for a reference. Perhaps he will provide his thoughts.
https://ybbpersonalfinance.proboards.com/thread/17/vix-skew-move?page=1&scrollTo=632