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Market Commentary

Market Commentary

Today's Coupons
  10-Year Notes   100-06 (+02.5)  
  FN 2.5% Coupon   104-15.5 (+01.5)  
  Support   2.081%  
  Resistance   0.571%  
  Tuesday, July 21, 2020

Treasury Yields Slightly Lower as Stocks Gain on Earnings Results

Market opened today's session with treasuries slightly edging higher across all maturities. 10-Year Treasury yield is at 0.6053, 0.49 bp decreased from prior closing of 0.6102.

Stocks rose today as investors digested a solid batch of corporate earnings and as they awaited further updates on a relief package from Congress. IBM jumped after reporting better-than-expected results and Coca Cola also rose despite a sharp decline in their profit in the second quarter after the company expressed optimism on demand from the economy reopening. In Europe, talks among the EU's executive arms produced a stimulus package worth 750 billion euros overnight, lifting investor sentiment as well. With the deal reached in Europe, stimulus attention is already turning to the U.S. where Treasury Secretary Steven Mnuchin will meet with House Speaker Nancy Pelosi this afternoon. Earnings season will continue today as well with United Airlines and Texas Instruments scheduled to post their results after the bell. So far, 58 S&P 500 companies have reported calendar second-quarter earnings and 81% of them have beaten analyst expectations. Elsewhere, the dollar fell and WTI crude rose above $42 a barrel as hopes for a recovery in demand revived on the back of recent positive news on vaccine development. Lastly, we had only one economic data released today; Chicago Fed National Activity Index in June rose to 4.11 from an upwardly revised prior of 3.50 vs. 4.00 consensus.

The curve has bull-steepened with UST 10-Year yield down 0.49 bp.
This Week's Events
  07/20 No Data - - - - - -  
  07/21 Chicago Fed Nat Activity Index 05:30 Jun 4.00 4.11 2.61 3.50  
  07/22 MBA Mortgage Applications 04:00 17 Jul - - 5.10% -  
  07/22 FHFA House Price Index MoM 06:00 May 0.30% - 0.20% -  
  07/22 Existing Home Sales 07:00 Jun 4.75m - 3.91m -  
  07/22 Existing Home Sales MoM 07:00 Jun 21.50% - -9.70% -  
  07/23 Initial Jobless Claims 05:30 18 Jul 1300k - 1300k -  
  07/23 Continuing Claims 05:30 11 Jul 17050k - 17338k -  
  07/23 Bloomberg Consumer Comfort 06:45 19 Jul - - 44.30 -  
  07/23 Leading Index 07:00 Jun 2.10% - 2.80% -  
  07/24 Markit US Services PMI 06:45 Jul P 51.00 - 47.90 -  
  07/24 Markit US Composite PMI 06:45 Jul P - - 47.90 -
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