Morning Market Update: July 10, 2020

Yield and Equities Fall as Investors Seek Safer Assets

Commentary for Thursday: Treasurys rallied as equities sold off in a risk off trading day. Yields opened slightly lower and moved sideways through the mid-morning. Yields fell through strong demand for a $19B 30-year treasury auction and as investors weighed the impact of the July 15 tax filing deadline on the Treasury's already extended cash balance. Yields ended lower across the curve.

This Morning: Treasury yields continue to shift lower as investors face renewed uncertainty regarding the spread of the coronavirus and the possibility of further lockdowns.

Wholesale Inventories fell by 1.2% exactly as predicted for the month of May and down from a modest 0.3% increase in April. 14 of the 19 inventory categories fell led by automotive inventories which fell 5.1% from April. Off-setting some of the inventory retraction was petroleum which was up 14.4% from April. Petroleum inventories are down 25% year over year.

Initial jobless claims for the week ended July 4 came in at 1.31M, slightly better than the consensus estimate of 1.38M. The reading for July 4 was also a small but slowing improvement from the 1.41M claims filed the week prior.

Atlanta Fed President Bostic said in a video conference for The Tax Policy Center " The models that I am looking at right now suggest that by the end of the year we'll have more jobs and more growth than we have right now, but we won't be at a level that is equal to where we were pre-crisis."


The morning market update is provided by: 

solutionsheadshots_hotchkiss_smJames Hotchkiss
Director, Member Strategy and Solutions


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