Weekly Market Update

Signs of Life in the Housing Market It’s a risk-off morning as Microsoft earnings left something to be desired and that has Treasuries prices higher and equities lower. Also, Germany’s decision to send tanks to Ukraine has some fearing an escalation in that war so a bit of a flight-to-safety trade is happening as well….

Is the LEI Index Calling a Recession? Investors are getting better yields again this morning in light trading given that much of Asia is closed this week for Lunar New Year celebrations. As earnings season rolls on here a modest risk-on tone continues and that’s weighing a bit on Treasury prices as well. The 10yr currently…

PPI & Retail Sales Point to Softening Pressures Treasury prices are rallying some in early trading as overnight news from Japan is aiding the bid. The Bank of Japan decided not to widen the band on its Yield Curve Control policy for their 10yr bond from the current -50bps +50bps range. By not widening the…

Some Nuance Enters Fed Comments After rallying down some 18bps in 10yr yields this week, today’s early trading is giving investors back some basis points as a slightly risk-on mood greets traders on a Friday. Positive earnings from Netflix and Alphabet looking to trim jobs has equities trading higher with offsetting selling in Treasuries. The…

Market Awaits Thursday’s CPI Report Treasury yields are taking back the increases from yesterday as optimism builds that tomorrow’s CPI will prove to be a positive as both stocks and bonds are rallying this morning. The rally in bonds may have its limits, however, as the Treasury will be selling $32 billion in a reopening…

Examining Bond Portfolio Trends: Fourth Quarter 2022 Beginning in May 2012, we started tracking  portfolio trends of our bond accounting customers here at SouthState|DuncanWilliams.  At present, we account for over 130 client portfolios with a combined book value of $13.96 billion (not including SouthState Bank), or $107 million on average per portfolio.  Twelve months earlier,…

Thursday’s CPI Should Decide the 25 or 50bps Rate Hike Debate The Treasury curve is lessening a bit this morning as the short-end flirts with unchanged readings while the longer-end is under a bit of selling pressure owing to a rally in risk assets off China reopening chatter, and the prospects of less rate hikes…

December Jobs Report Hints at Soft Landing Nonfarm payroll jobs increased 223 thousand while the unemployment rate dipped from a downwardly revised 3.6% to 3.5%. Expectations were for 203 thousand new jobs, while revisions for the prior two months subtracted 28 thousand jobs. While on its face this report was perhaps stronger than expected the…

Investors Keen to See Fed’s Thoughts on Inflation Treasury prices are higher again this morning, and it’s from a similar driver: better news on inflation. Yesterday, it was German CPI coming in under expectations and today it’s French CPI doing the same thing. Investors have been betting for a while now that inflation will ebb…

Investors Betting on Soft Inflation and Wage Numbers Treasuries are under a bit of pressure this morning as former New York Fed President Bill Dudley has basically told the market don’t fight the Fed. He speaks of the differing outlook in 2023 where investors expect a sub 5% terminal rate with 50bps of rate cuts…

Fed Still Failing to Convince Investors Both 10yr and 30yr Treasuries are having a hard time escaping the gravitational pull of 3.50% yields and that’s where both find themselves this morning despite a week full of first-tier information. 3.50% has become a landing spot since early December, and after the Fed it remains so again….

It’s All About the Fed Today As we enter Fed Day, Treasury yields are steepening just a bit, but it will mostly be a low volume affair until we get to the 2pm ET announcement. The 10yr finished about 10bps lower in yield yesterday off the cool CPI report and closed at the psychologically important…