Vital information about the markets, the economy, rates, and more.


Financial Focus

February 20, 2019 

GOOD MORNING!    Walmart’s earnings beat and reporting banner sales during the holiday season, plus the NAHB Housing Market Index surprising to the upside had stocks erasing early losses and to drift up.  Walmart’s sales results added more suspicion on last week retail sales miss.  Treasuries evidently didn’t get the same memo as stocks, oil and gold.  Yields did a persistent grind lower.  At work on market rates may have been risk events hanging over the market and the gravitational pull as Japan’s 10-year flipped back to a negative yield and more European maturities are trading at negative yields.  The German 10-year is yielding 0.10% after trading at a nosebleed 0.57% last October.  Economic outlook uncertainty and a bet that central banks there will have be more accommodative in Asia and Europe are pulling yields down and sending investors to America for some return on fixed income securities. 

     US stock index futures are leaning slightly against the prevailing winds in very early trading.  They are flat to slightly lower while the majority of Asian and European markets are in the green.  Treasuries are also little changed.  Barring a breaking headline on politics or geo-politics the markets may stay that way until the minutes of the FOMC January 30 meeting are released this afternoon.  The minutes are of upmost interest to the markets as that was the meeting that the Fed hit the pause button on rate normalization and shifted to a more dovish stance.  Some may also say that it was when the Fed kowtowed to the markets and initiated the Powell put.  The markets now seem to be pushing the Fed toward ending the reduction of the huge amount of assets cumulated during QE.  The attached graphs may explain the motivation behind the markets.  With traders/funds/fast money positioned heavily on the long side of stocks, bonds and the dollar, the release of the minutes may act as a catalyst for a large market reaction.     

                                   

GENERAL
TODAY
PREVIOUS
FED FUNDS
2.25% to 2.50% 2.25% to 2.50%
1 MONTH LIBOR
2.48038%
2.48038%
S & P 500
2779.76 2775.60
GOLD
1347.00
1331.90
YEN
110.77 110.78
EURO
1.1344 1.1280
WEST TEXAS CRUDE
56.09 55.59
T-BILLS
YIELD
YIELD
3 MONTH
2.43 2.41
6 MONTH
2.51 2.49
1 YEAR
2.53 2.53
T-NOTES / BONDS
YIELD
YIELD
2 YEAR
2.48 2.50
3 YEAR
2.45
2.48
5 YEAR
2.45
2.48
10 YEAR
2.63 2.66
30 YEAR
2.97 2.99

Data Source: Bloomberg Financial Markets
022019 Fed markets