Economic Hope Squares Off Against Virus Fears (Again)

Markets continue trying to sort out the prospects for a recovery vs the risk of covid-19 resurgence. Today's battle was between super strong Retail Sales data and disconcerting covid headlines for a few US states as well as Beijing. 

Econ Data / Events

  • 11:30-11:50 AM (ET) - Fed 30yr UMBS Buying  

  • Retail Sales:+17.7 vs +8.0 f'cast, -14.7 prev

  • NAHB Builder Confidence: 58 vs 45 f'cast, 37 prev

  • Industrial Production: +1.4 vs +2.9 f'cast, -12.5 prev

Market Movement Recap
07:53 AM

Stocks and bond yields higher overnight.  Follow-through trading on yesterday's corporate bond buying announcement from Fed.  Also, talk of $1 trillion infrastructure bill.  10yr yield up 3bps to start the day (.75%).

08:43 AM

Stocks surging and bond yields rising on super strong Retail Sales data.  MBS look like they're still asleep with no discernible reaction so far.

10:32 AM

Stronger NAHB may not have helped, but markets focused more on Powell saying "near a bottom" and "beginning the 2nd phase of the re-opening."  Yields at the highs.  MBS near lows.

10:50 AM

Losses reversed course on a variety of COVID-related headlines, although Powell was also saying more sobering things about the economy around the same time.

02:19 PM

Uneventful afternoon so far with bonds sideways at slightly weaker levels, but well inside the highs/lows discussed in the past 2 updates.