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Market Commentary

Market Commentary

Today's Coupons
  10-Year Notes   100-01.5 (-00.5)  
  FN 2.5% Coupon   104-14 (-01.5)  
  Support   2.081%  
  Resistance   0.571%  
  Friday, July 17, 2020

Treasury Yields Remain Flat with Tech Sector under Pressure

Market opened today’s session with treasuries nearly unchanged across all maturities. 10-year Treasury yield is at 0.6184, 0.16 bp increased from prior closing of 0.6168.

Stocks fluctuated this morning, trying to rebound from late losses yesterday when Netflix reported disappointing second quarter results. The company also posted its subscriber growth of 2.5 million for the third quarter, well below expectation of 5.27 million. Netflix’s setback from yesterday made investors to closely watch how the broader tech sector would react in the near future. Other major tech companies including Facebook, Amazon, Alphabet, and Microsoft were all down week to date as well. Meanwhile, Treasuries and gold advanced while the dollar weakened. We have a few economic data released this morning. US residential construction starts rose by 17.30% to an annualized rate of 1186k in June as builders ramped up production with the economy reopening, marking the biggest MoM increase since October 2016. Building Permits also rose to 1241k from a downwardly revised prior of 1216k vs. 1293k consensus. Lastly, University of Michigan Sentiment surprisingly fell to 73.20 from 78.10 prior while consensus showed 79.00.

The curve has steepened with UST 10-Year yield up 0.16 bp.

This Week's Events
  07/13 Monthly Budget Statement 11:00 Jun -$863.0b -$864.1b -$8.5b -  
  07/14 NFIB Small Business Optimism 03:00 Jun 97.80 100.60 94.40 -  
  07/14 CPI MoM 05:30 Jun 0.50% 0.60% -0.10% -  
  07/14 CPI YoY 05:30 Jun 0.60% 0.60% 0.10% -  
  07/14 CPI Index NSA 05:30 Jun 257.706 257.797 256.394 -  
  07/14 CPI Core Index SA 05:30 Jun 265.884 266.065 265.441 -  
  07/15 MBA Mortgage Applications 04:00 10 Jul - 5.10% 2.20% -  
  07/15 Import Price Index MoM 05:30 Jun 1.00% 1.40% 1.00% 0.80%  
  07/15 Import Price Index YoY 05:30 Jun -3.70% -3.80% -6.00% -6.20%  
  07/15 Export Price Index MoM 05:30 Jun 0.80% 1.40% 0.50% 0.40%  
  07/15 Export Price Index YoY 05:30 Jun - -4.40% -6.00% -6.20%  
  07/16 Initial Jobless Claims 05:30 11 Jul 1250k 1300k 1314k 1310k  
  07/16 Continuing Claims 05:30 4 Jul 17500k 17388k 18062k 17760k  
  07/16 Bloomberg Consumer Comfort 06:45 12 Jul - 44.30 42.90 -  
  07/17 U. of Mich. Sentiment 07:00 Jul P 79.00 73.20 78.10 -
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