FinSer 

 Financial Focus

February 14, 2020 

GOOD MORNING!    Stocks and Treasury yields were slumping coming into the US opening Thursday as the rising number renewed fears and concerns that the impact could ripple through the global economy.  The World Health Organization (WHO) tried to downplay the spike in confirmed cases by saying it didn’t necessary reflect a sudden surge in new infections because the new diagnostic testing may uncover cases several weeks old.  The markets already did not believe China had credibility, and now believes the WHO may be stretching theirs.  Stocks briefly bounced and pared losses some of the steep early morning losses.  Treasury yields came off their lows, but safe harbor bidding underpinned the market.  Suspected foreign inflows into the secondary market and into this week’s auctions had the 30-year T-bond coming at a record low auction rate of 2.061%.

     Stocks have settled down this morning and US stock index futures are little change to slightly up in very early trading.  Treasury prices are also up yields slightly lower, from yesterday’s close as foreign fund flows are inbound into US assets.  Treasuries could likely also see domestic inflows this afternoon as many will want to sail into the safe harbor for the long Presidents Day holiday weekend.  Before that happens, there are some highlighted economic that the market may or may not take notice, believing the current incoming reports reflect the pre-COVID-19 black swan.  On tap are January’s retail sales, import-export price indexes, industrial production/capacity utilization and the preliminary reading of the University of Michigan Consumer Sentiment Index.  The dollar is up on the foreign inflows and, in spite of that, oil is up on reports/rumors that Chinese refiners are buying the price dip.  The markets will continue to be jittery and volatile.   

                                                         

GENERAL
TODAY             
PREVIOUS        
FED FUNDS
1.50% to 1.75% 1.50% to 1.75%
1 MONTH LIBOR
1.65013% 1.65275%
S & P 500
3373.94 3379.45
GOLD
1478.90 1577.20
YEN
109.82 109.68
EURO
1.0835 1.0868
WEST TEXAS CRUDE
51.42 51.17
T-BILLS
YIELD                
YIELD                 
3 MONTH
1.57 1.56
6 MONTH
1.54 1.53
1 YEAR
1.47 1.47
T-NOTES / BONDS
YIELD                 
YIELD                  
2 YEAR
1.42 1.40
3 YEAR
1.39 1.38
5 YEAR
1.42 1.40
10 YEAR
1.59 1.58
30 YEAR
2.04 2.04

Data Source: Bloomberg Financial Markets