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Market Commentary

Market Commentary

Today's Coupons
  10-Year Notes   1.494%  
  Support   1.668%  
  Resistance   1.505%  
  FN 2.5% Coupon   103.297 (+0.062)  
  Thursday, June 24, 2021

Stocks Climb as US Jobless Claims Fall; Durable Goods Expected to Slow Down

The market opened today's session with treasuries fluctuating. The 10-Year Treasury yield is currently at 1.4868, 0.16 bps higher than prior closing of 1.4852.
US stocks climbed towards record-high as data showed economic progress and recovery despite inflation concerns. Most players in the S&P 500 saw gains, amounting to a 0.60% increase on the Index, with retail and tech companies as the best performers. Similarly, both the tech-heavy Nasdaq 100 and Europe’s Stoxx 600 saw 0.90% gains. The health-care sector was led by Eli Lilly & Co. as their experimental Alzheimer’s drug gained breakthrough status from US regulators. Furthermore, investors have also fueled optimism, as shares of the fastest-growing US companies have finally stopped moving in a mutually inclusive manner with meme stocks. The Fed Reserve is scheduled to release results from its stress tests of the biggest US banks after the market closes. As of now, all banks are expected to pass, paving the way for a doubling of payouts during the next four quarters. In terms of the US infrastructure plan, President Biden is close to agreeing on $559 billion with the senate, fulfilling one of his top priorities. In terms of jobless claims, US state unemployment insurance applications fell last week, even though they were forecasted to increase. Alaska, Iowa, Mississippi, and Missouri cut off all federal assistance on June 12, and eight more states in the midwest followed on June 19, causing drops in PUA and PUEC claims in those states. Despite the drop, total continued claims in all programs remains extraordinarily high. Around 14.8 million claims were found across all programs in the week of June 5. Nevertheless, this expiration of enhanced unemployment benefits will push more Americans to seek employment, and possibly speed up the labor market recovery. As June participation improves, thanks to a projected decline in jobless benefits, the unemployment rate is expected to hold at 5.80%. In terms of durable goods, the May durable goods report shows that equipment-investment growth is expected to set back to a moderate pace after a strong second quarter. Total durable goods orders rose 2.30% in May, with large gains in transportation equipment. A rotation away from pandemic beneficiaries like computers and medical equipment is expected. On Friday, expect reports on US personal income and spending.
The curve has bear-flattened with UST 10-Year yield up 0.16 bps.
This Week's Events
  06/21 Chicago Fed Nat Activity Index 05:30 May 0.70 0.29 0.24 -0.09  
  06/22 Richmond Fed Manufact. Index 07:00 Jun 18.00 22.00 18.00 -  
  06/23 MBA Mortgage Applications  04:00 18 Jun - 2.10% -4.20% -  
  06/23 Markit US Manufacturing PMI 06:45 Jun P 61.50 62.60 62.10 -  
  06/23 Markit US Composite PMI 06:45 Jun P - 63.90 68.70 -  
  06/23 Markit US Services PMI 06:45 Jun P 70.00 64.80 70.40 -  
  06/24 Durable Goods Orders 05:30 May P 2.80% 2.30% -1.30% -0.80%  
  06/24 Initial Jobless Claims 05:30 19 Jun 380k 411k 412k 418k  
  06/24 Continuing Claims 05:30 12 Jun 3460k 3390k 3518k 3534k  
  06/24 GDP Price Index 05:30 1Q T 4.30% 4.30% 4.30% -  
  06/25 PCE Deflator MoM 05:30 May 0.50% - 0.60% -  
  06/25 PCE Deflator YoY 05:30 May 3.90% - 3.60% -  
  06/25 U. of Mich. Sentiment 07:00 Jun F 86.50 - 86.40 -  
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