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Market Commentary

Market Commentary

Today's Coupons
  10-Year Notes   99-26 (+08)  
  FN 3.5% Coupon   102-20.5 (+02.5)  
  Support   3.237%  
  Resistance   1.457%  
Tuesday, October 01, 2019
Treasury Yield Down With President’s Approval Rating
Market opened today’s session with treasuries rallying across all maturities. 10-Year Treasury yield is at 1.6508, 1.38 bps decreased from prior closing of 1.6646.

This morning the Dow Jones indicated a gain of more than 90 points at the open. S&P 500 and Nasdaq 100 futures also pointed to a strong open. Market sentiment appears to be improving over anticipation for peaceful trade negotiations. Investors are waiting to hear from the World Trade Organization on an aircraft subsidies dispute, which could allow the US to impose tariffs on Europe. Beginning October 7th, Charles Schwab will be cutting its trading commission cost for US stocks, ETFs, and options from the previous $4.95 to $0; trading options will continue to cost 65 cents per contract. The changes will apply to securities on Canadian exchanges as well. Shares of Schwab fell nearly 8% in response to the company’s recent change. Silicon Valley start-up, Robinhood, put pressure on Wall Street brokerages by offering stock trading for free in 2013. Whereas its competitors, like Charles Schwab and TDAmeritrade charged $4.95 and $6.95, respectively. Schwab’s announcement came after Interactive Brokers took the same step towards commission free trades last Thursday. Rival brokerage firms TDAmeritrade and ETrade shares plummeted more than 20% and 18%, respectively. The yield on 10-Year Treasuries climbed seven basis points to 1.74%

The All-America Economic Survey found a substantial drop in Trump’s approval rating, registering the lowest level of his presidency. Only 37% approve of how the President is doing his job, and 53% disapprove. The president’s economic approval numbers were also showing a decline to 42% from 48%. 50% of Americans were found to disapprove of Trump’s handling of the economy, up from a previously reported 43%, the largest economic negative rating of his presidency. The House Intelligence Committee subpoenaed Trump’s personal lawyer, Rudy Giuliani, as part of its impeachment inquiry. The panel, along with the Oversight and Foreign Affairs committees, is seeking documents related to the attorney’s efforts to get Ukraine to investigate the Biden family. The subpoena demanded that Giuliani produce all text messages, phone records, and any other communications in order to determine the full extent of this effort by the President and his Administration to press Ukraine to interfere in our 2020 presidential election. Giuliani has until October 15th to produce the necessary documents.

The curve has bull-steepened with UST 10-Year yield down 1.38 bps.
This Week's Events
  09/30 Dallas Fed ManfActivity 07:30 Sep 1.00 1.50 2.70 -  
  10/01 Markit US Manufacturing PMI 06:45 Sep F 51.00 51.10 51.00 -  
  10/01 ISM Manufacturing 07:00 Sep 50.00 47.80 49.10 -  
  10/01 ISM Prices Paid 06:45 Sep 50.50 49.70 46.00 -  
  10/01 Construction Spending MoM 06:00 Aug 0.50% 0.10% 0.10% -  
  10/02 MBA Mortgage Applications 04:00 27 Sep - - -10.10% -  
  10/02 ADP Employment Change 05:15 Sep 140k - 195k -  
  10/03 Challenger Job Cuts YoY 04:30 Sep - - 39.00% -  
  10/03 Initial Jobless Claims 05:30 28 Sep 215k - 213k -  
  10/03 Continuing Claims 05:30 21 Sep 1658k - 1650k -  
  10/03 Bloomberg Consumer Comfort 06:45 29 Sep - - 61.70 -  
  10/03 Markit US Services PMI 06:45 Sep F 50.90 - 50.90 -  
  10/03 Markit US Composite PMI 06:45 Sep F - - 51.00 -  
  10/03 Factory Orders 07:00 Aug -0.20% - 1.40% -  
  10/03 Durable Goods Orders 07:00 Aug F - - 0.20% -  
  10/03 Durables Ex Transportation 07:00 Aug F - - 0.50% -  
  10/04 Change in Nonfarm Payrolls 05:30 Sep 147k - 130k -  
  10/04 Unemployment Rate 05:30 Sep 3.70% - 3.70% -  
  10/04 Average Hourly Earnings MoM 05:30 Sep 0.30% - 0.40% -  
  10/04 Average Hourly Earnings YoY 05:30 Sep 3.20% - 3.20% -  
  10/04 Labor Force Participation Rate 05:30 Sep 63.20% - 63.20% -
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