U.S. stock futures are higher.
U.S. stock futures are lower. The S&P closed higher yesterday, marking the 33rd all-time high of 2021 and as of today it is up 14.26% (YTD) and 10y treasury at 1.45%. The combination of stable economic growth post COVID restrictions, accommodative Fed, fiscal stimulus, and lower inflation expectations have been a positive catalyst for equities. Additionally, as of today, 10y bond yields dropped 0.113 percentage points this month. ADP reported that jobs at U.S companies grew by 692,000 in June and exceeding estimates of 550,000. The consensus for Friday’s employment report is 675,000. OPEC + is meeting today to discuss changes in production with Brent at roughly $75. European markets are lower driven by new variant cases and Asian markets closed mixed.
U.S. stock futures are higher. Going into the last week of the 2Q’21, the S&P starting up almost 14%, Dow up at 12.5%, and Nasdaq up at 11.4%. Investors will be focused on Friday’s employment report and 10y yields are above 1.50% and is expected to remain range bound until then. Economic reopening is accelerating as more adults are vaccinated and overall infection rates are lower. This remains a positive catalyst for equity markets and confidence on the Fed’s ability to tame inflation is fairly tenable, as inflation expectations decline. Bitcoin prices increased 4% this morning with prices above $34k. Corporate spreads continue to remain narrow versus treasury yields and overall yields have declined noticeably. International markets are trading mixed this morning.
U.S. stocks are holding gains despite weaker data. New orders for durable goods rose 2.3% in May, weaker than the expected 2.8% rise. Core capital goods also missed expectations, falling 0.1% against expectations for a 0.5% rise. Weekly jobless claims were roughly unchanged last week at 411,000, however, claims were higher than estimates of 380,000 and the prior week was revised slightly higher to 418,000. On the political front, President Biden will meet with a bipartisan group of 21 senators today to review a $953 bln infrastructure plan proposal which would include $559 bln in new spending. Overseas, European stocks are trading higher with financial stocks leading the advance. Asian stocks edged higher with South Korean stocks leading the region.
U.S. stock futures are higher. This morning, May CPI was reported at 5% (y/y) versus consensus of 4.7% and the fastest increase since mid-2008. The headline number, which represents a basket including food, energy, groceries, housing cost and other items across a wider spectrum, was 5.3% in August 2008. The 10y and 30y yields are higher, after hitting weekly lows yesterday. Additionally, jobless claims totaled 376K from last week and compared to estimate of 369k, initial filings have been moving steadily lower. European stocks are lower, with Christine Lagarde speaking this morning and made no significant changes to monetary policy. Asian markets closed mixed and corporate spreads remain narrow and mostly within a limited trading band.
U.S. stock markets are mixed with the technology-heavy Nasdaq trading higher. Helping to boost technology stocks this morning is news that the Senate passed the US Innovations and Competition Act (USICA) on Tuesday. The USICA will help America remain competitive with China on technological innovation. The $250 bln bill will provide funding for domestic semiconductor R&D, an increase in funding for the National Science Foundation as well as other R&D spending in applied sciences. The bill will move to the House in coming weeks prior to reaching President Biden’s desk. Stocks are likely to have a muted session today as investors await May’s CPI reading due out tomorrow. On the data front, mortgage applications fell 3.1% last week as refinancing slowed despite a drop in the average 30-yr fixed rate mortgage to 3.15%. European stocks closed lower with materials stocks leading the decline. Asian stocks closed mostly lower after China’s May producer prices came in slightly hotter than expected.
U.S. stock futures are lower. Equity futures are lower due to higher-than-expected CPI report. CPI rose 4.2% in April, faster than expected and the consensus was for 3.6%. The monthly gain was 0.8%, against the expected 0.2%. Higher data was mainly related to a lower base from last year. Principally, inflation was low at this same time in 2020 and the year over year comparison might be distorted. However, the Dow, S&P and Nasdaq-100 futures declined further post report and 10y and 30y yields are higher. Colonial Pipeline is expected to restore a major portion of operations by the end of the week; however, gasoline prices could rise further if pipelines are not fully reinstated. European markets are higher and Asian closed lower. Spreads remain tight and this week Amazon issued roughly $15 billion corporate bonds across the benchmark maturity spectrum, taking full advantage of lower yields + spreads. The proceeds are mainly for general corporate purposes.