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Market Commentary

Market Commentary

Today's Coupons
  10-Year Notes   1.631%  
  Support   1.584%  
  Resistance   1.235%  
  FN 2.5% Coupon   103.69 (+0.14)  
  Friday, April 30, 2021

US Futures Drop While Personal Incomes Soar

Today's market session opened with treasuries mostly unchanged across all maturities. The 10-Year Treasury yield is at 1.6312, 0.31 bp lower than prior closing of 1.6343.
US stock-index futures retreated as traders took a breather at the end of the month during record highs for the S&P 500 and earnings disappointments. June contracts on the Russell 2000 and Nasdaq 100 futures dropped around 0.7% each after China’s antitrust crackdown weighed on Asian technology shares. The 10-Year Treasury yield is still on course for the biggest monthly decline since July. The US economy has seen a resurgence in confidence as positive data culminated in a report on Thursday showing quarterly growth at an accelerating 6.40%. Given the Federal Reserve’s resolve, investors are to stay bullish on stocks despite high valuation concerns. With uncertainties about growth and monetary policy put aside for the moment, investors are focusing on corporate profits. Of the 290 companies in the S&P 500 that have reported results so far, about 88% have met or beaten expectations. While companies from Apple to Facebook crushed analyst estimates, there were still some disappointments. Twitter plummeted in early trading as its sales forecast missed estimates and the company said user growth rate may slow down. Chevron Corp. slid 3% even though it posted high cash flow as it said it will wait before reinstating share buybacks. Apple fell 1.2% due to concerns regarding chip shortages. Amazon reported a blockbuster quarter, pushing many analysts to raise their price targets and estimates, raising the stock 2.1% in premarket trades. In Europe, the Stoxx 600 gauge was dragged down by raw-materials and technology shares. AstraZeneca reported better-than-expected profits, helping the health-care sector see gains. Powered by a third round of pandemic-relief checks, US personal income soared in march, sparking a sharp gain in spending. The 21.10% surge in incomes followed a 7.00% decline in February, the Commerce Department showed on Friday. Meanwhile, purchases of goods and services increased 4.20% last month, the most since June. With spending on the rise, more cash in people’s bank accounts and vaccinations driving reopenings, economic growth is poised to further accelerate in the coming month.
The curve has bull-flattened with UST 10-Year yield down 0.31 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% 4.10% 2.00% -  
  04/29 GDP Annualized QoQ 05:30 1Q A 6.70% 6.40% 4.30% -  
  04/29 Initial Jobless Claims 05:30 24 Apr 540k 553k 547k 566k  
  04/29 Continuing Claims 05:30 17 Apr 3590k 3660k 3674k 3651k  
  04/30 U. of Mich. Sentiment 07:00 Apr F 87.50 88.30 86.50 -
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