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Market Commentary


 
Today's Coupons
 
  10-Year Notes   100-30 (+04)  
 
  FN 3.5% Coupon   102-24 (00)  
 
  Support   3.237%  
 
  Resistance   1.465%  
 
 
 
 
Friday, October 04, 2019
 
 
Treasury Yields Increase - Lowest Unemployment Rate in 50 Years
 
 
Market opened today’s session with treasuries lower across all maturities. 10-Year Treasury yield is at 1.5375, 0.34 bps increased from prior closing of 1.5341.

Stocks ended on a high note yesterday; recovering some losses from a steep two day sell-off amid increased expectations that the Federal Reserve will cut rates later this month. Expectations for a rate cut surged following the release of disappointing data on the US services sector. The Dow Jones closed 122.42 points higher at 26,201.04. The S&P 500 gained 0.8% to 2,910.63 and the Nasdaq Composite climbed 1.1% to 7,872.26. This morning, the Dow indicated a gain of about 53 points at the open. The S&P 500 and Nasdaq futures showed a slight increase as well. Although stocks traded higher today, the Dow was down 2.3% through Thursdays close while the S&P 500 had lost 1.7% and the Nasdaq was down 0.9% to date, all on pace to record large losses for the week. Between Tuesday and Wednesday, the Dow lost more than 800 points. On Friday, the Bureau of Labor Statistics reported that the US economy added 136,000 jobs in September; some economists anticipated an increase of 145,000 new jobs. The US Treasury will auction $45 billion in three-month bills and $42 billion in six-month bills, on October 7th. The yield on 10-Year Treasuries was unchanged at 1.53% and the yield on 2-year Treasuries increased less than one basis point to 1.39%.

The Bureau of Labor Statistics Friday report showed the health care industry led the way in job creation while the retail sector lost another 11,000 jobs, bringing the total to 197,000 in jobs the industry has lost since January 2017. Health cares 39,000 new jobs set the pace for the month, while professional and business services increased by 34,000, which was below the 47,000 reported in 2018. The report also showed that average hourly earnings were little changed over the month and slightly increased 2.90% for the year, the lowest increase since July 2018. The jobless rate dropped 0.20% to 3.50%, matching a level it has not seen since December 1969. Readings earlier in the week showed continued contraction in manufacturing and a sharp decline in the much larger services industry, all as a result of the current trade war between the US and China. The central bank meets October 29th - October 30th to discuss the possibility of another rate cut.

The curve has bear-flattened with UST 10-Year yield up 0.34 bps.
 
 
   
 
   
 
This Week's Events
 
 
  DATE EVENT TIME(PT) PERIOD SURVEY ACTUAL PRIOR REVISED  
  09/30 Dallas Fed ManfActivity 07:30 Sep 1.00 1.50 2.70 -  
                   
  10/01 Markit US Manufacturing PMI 06:45 Sep F 51.00 51.10 51.00 -  
                   
  10/01 ISM Manufacturing 07:00 Sep 50.00 47.80 49.10 -  
                   
  10/01 ISM Prices Paid 06:45 Sep 50.50 49.70 46.00 -  
                   
  10/01 Construction Spending MoM 06:00 Aug 0.50% 0.10% 0.10% -  
                   
  10/02 MBA Mortgage Applications 04:00 27 Sep - 8.10% -10.10% -  
                   
  10/02 ADP Employment Change 05:15 Sep 140k 135k 195k 157k  
                   
  10/03 Challenger Job Cuts YoY 04:30 Sep - -24.80% 39.00% -  
                   
  10/03 Initial Jobless Claims 05:30 28 Sep 215k 219k 213k 215k  
                   
  10/03 Continuing Claims 05:30 21 Sep 1654k 1651k 1650k 1656k  
                   
  10/03 Bloomberg Consumer Comfort 06:45 29 Sep - 62.00 61.70 -  
                   
  10/03 Markit US Services PMI 06:45 Sep F 50.90 50.90 50.90 -  
                   
  10/03 Markit US Composite PMI 06:45 Sep F - 51.00 51.00 -  
                   
  10/03 Factory Orders 07:00 Aug -0.20% -0.10% 1.40% -  
                   
  10/03 Durable Goods Orders 07:00 Aug F - 0.20% 0.20% -  
                   
  10/03 Durables Ex Transportation 07:00 Aug F - 0.50% 0.50% -  
                   
  10/04 Change in Nonfarm Payrolls 05:30 Sep 145k 136k 130k 168k  
                   
  10/04 Unemployment Rate 05:30 Sep 3.70% 3.50% 3.70% -  
                   
  10/04 Average Hourly Earnings MoM 05:30 Sep 0.20% 0.00% 0.40% -  
                   
  10/04 Average Hourly Earnings YoY 05:30 Sep 3.20% 2.90% 3.20% -  
                   
  10/04 Labor Force Participation Rate 05:30 Sep 63.20% 63.20% 63.20% -
                   
 
 
 
 
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