Robert Shiller of S&P 500’s Case-Shiller fame agreed with some of Fed Chair Yellen’s comments. You read here in a column yesterday the Chairperson made what appeared to be an offhanded comment that stocks are currently overvalued. This from an interview of Shiller by Rick Santelli.*

Thenall eyes on April jobs numbers as if on cue yesterday, stocks fell by triple digits and mortgage bond yields rose. Today, the Dow closed higher, ahead of tomorrow’s Unemployment Report for April, at 17924.06, up 82.08 and still shy of the stubborn 18,000 mark.

It should be no surprise when the Fed talks of overvaluation in stocks while at the same time pumped $85 billion per month into the economy buying mortgage backed securities and Treasuries for nearly four straight years, the comments regarding valuation seem a bit contradictory. Still, according to Shiller, while the comments were made she wasn’t “alarmist about it.”

So what are we to make of stocks and bonds? Again as if on cue, as stocks recovered somewhat today, mortgage bonds also rallied, closing at 101.3, up 11/32, causing rates to fall. Stocks do better then mortgage bonds follow right along. Unless you’re involved in real estate or funding private deals you’re not getting double digit returns on your investments and quite frankly could care very little what Fed Chair Yellen says. Yes, financing costs will get more expensive in the future compared to today but people always need housing and there’s no sign of any real estate bubble, either. Check back here tomorrow for reaction to the April jobs numbers.

* 05/07/2015