Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of American Capital Agency
So what: A couple of things are going on here. Investors are concerned that mortgage REITs will be crushed if the U.S. defaults and is downgraded, which would lead to higher borrowing costs. A massive spike in volume -- with nearly 2 million shares trading hands in a minute -- brought the stock to today's low.
Now what: Our good friend Fat Finger Freddy was at it again today, flooding the market with more shares than it could handle. Luckily, the sell-off didn't last long, and shares spiked higher and are currently down just 2.4%. I would be leery of mortgage REITs in coming weeks, as a U.S. downgrade could mean an end to their cushy spreads.
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