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Market Commentary

Market Commentary

Today's Coupons
  10-Year Notes   98-19 (-03.5)  
  FN 3.5% Coupon   102-27.5 (-00.5)  
  Support   2.784%  
  Resistance   1.702%  
  Tuesday, December 31, 2019

Treasury Yields Climb on Final Day of 2019

Market opened today’s session with treasuries selling-off across all maturities. 10-Year Treasury yield is at 1.9228, 4.40 bps increased from prior closing of 1.8788.

Stocks fell slightly on the final day of 2019 but the S&P 500 is still poised to record annual gain of nearly 30%. The dollar dropped to its lowest level since March, extending its losing streak to four days, and Treasuries sold-off. With thin trading volume expected before the New Year’s holiday, market sentiment is still dominated by stabilizing global economy and easing of trade tension between the US and China. On the trade front, President Trump tweeted this morning that he will sign phase one trade deal with China on January 15th at the White House. As we close out one of the best annual performances of equities in the past decade, the gains of Apple and Microsoft stood out by rallying 84.4% and 55.2% this year, respectively. These two were the best performing Dow stocks of 2019 and accounted for roughly about 15% of the gains of the S&P 500 in 2019. In the economic calendar, FHFA House Price Index in October slipped to 0.20% from upwardly revised prior of 0.70% vs. 0.40% consensus. Also, Conference Board Consumer Confidence in December edged lower to 126.50 from upwardly revised prior of 126.80 vs. 128.50 consensus.

The curve has bear-steepened with UST 10-Year yield up 4.40 bps.
This Week's Events
  12/30 Wholesale Inventories MoM 05:30 Nov P 0.20% 0.00% 0.10% 0.00%  
  12/30 Pending Home Sales MoM 07:00 Nov 1.40% 1.20% -1.70% -1.30%  
  12/30 Pending Home Sales NSA YoY 07:00 Nov 7.40% 5.60% 3.90% 4.40%  
  12/30 Dallas Fed ManfActivity 07:30 Dec 0.00 -3.20 -1.30 -  
  12/31 FHFA House Price Index MoM 06:00 Oct 0.40% 0.20% 0.60% 0.70%  
  12/31 S&P CoreLogic CS 20-City MoM SA 06:00 Oct 0.30% 0.43% 0.36% 0.35%  
  12/31 S&P CoreLogic CS 20-City YoY NSA 06:00 Oct 2.10% 2.23% 2.10% 2.08%  
  01/01 No Data - - - - - -  
  01/02 Initial Jobless Claims 05:30 28 Dec 220k - 222k -  
  01/02 Continuing Claims 05:30 21 Dec 1680k - 1719k -  
  01/02 Bloomberg Consumer Comfort 06:45 29 Dec - - 62.30 -  
  01/02 Markit US Manufacturing PMI 06:45 Dec F 52.50 - 52.50 -  
  01/03 Construction Spending MoM 07:00 Nov 0.40% - -0.80% -  
  01/03 ISM Manufacturing 07:00 Dec 49.00 - 48.10 -  
  01/03 ISM Prices Paid 07:00 Dec 47.50 - 46.70 -  
  01/03 FOMC Meeting Minutes 11:00 11 Dec - - - -
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