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Market Commentary

Market Commentary

Today's Coupons
  10-Year Notes   1.641%  
  Support   1.576%  
  Resistance   1.209%  
  FN 2.5% Coupon   103.42 (-0.02)  
  Wednesday, April 28, 2021

US Stocks Mixed With Earnings; Biden Unveils Massive Family Aid Plan Funded by Taxing Rich

The market opened today's session with treasuries almost unchanged across all maturities. The 10-Year Treasury yield is at 1.6253, 0.37 bp higher than prior closing of 1.6216.
US equities were mixed as investors gathered the latest group of corporate earnings reports and waited for clues of the Federal Reserve’s latest stimulus announcement. The S&P 500 rose 0.2%, trading around their all-time high, while Nasdaq 100 saw little to no change with most stocks dropping after the first round of earning reports from tech giants. Alphabet Inc. rose toward a record high as analysts raised price targets for the stock after its results showed a surge in ad sales related to travel and retail. Microsoft Corp. dropped the most in a month after failing to deliver the blockbuster results some analysts were looking for. Apple Inc. and Facebook Inc. will report after the close of trading on Wednesday. Equity investors are searching for new catalysts with stock valuations about 25% above their five-year average. In addition to solid corporate earnings results, traders may need further assurance that the Fed will overlook stronger economic data to keep rates ultra-low and bond purchases at pace. Policy makers are expected to hold interest rates near zero at the conclusion of a two-day meeting Wednesday and keep buying bonds at the current $120 billion monthly pace. Also on Wednesday, during his first address to a joint session of Congress, President Joe Biden will unveil a sweeping $1.8 trillion plan to expand educational opportunities and child care for families, funded in part by the largest tax increase on wealthy Americans in decades. Called the American Families Plan, Biden’s third major legislative proposal combines $1 trillion in spending with $800 billion in tax cuts and credits for middle- and lower-income families. The US GDP on Thursday is forecast to show growth strengthened during the first quarter.
The curve has bear-steepened with UST 10-Year yield up 0.37 bp.
This Week's Events
  04/26 Durable Goods Orders 05:30 Mar P 2.30% 0.50% -1.20% -0.90%  
  04/28 MBA Mortgage Applications 04:00 23 Apr - -2.50% 8.60% -  
  04/29 GDP Price Index 05:30 1Q A 2.60% - 2.00% -  
  04/29 GDP Annualized QoQ 05:30 1Q A 6.70% - 4.30%    
  04/29 Initial Jobless Claims 05:30 24 Apr 540k - 547k -  
  04/29 Continuing Claims 05:30 17 Apr 3590k - 3674k -  
  04/30 U. of Mich. Sentiment 07:00 Apr F 87.50 - 86.50 -
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