FinSer 

 Financial Focus

September 24, 2020 
 

    GOOD MORNING! On balance the parade of talking Fedheads on Wednesday was a pessimistic group. That wasn’t a surprise, given the mass groveling for more federal fiscal relief. The pessimism and a stronger dollar weighed on stocks and precious metals. Even with stocks slumping, the Treasury market traded slightly heavy as dealers built in a yield concession ahead of the record-sized 5-year T-note auction. It worked and final demand for the Notes proved strong but it couldn’t rally as the new issuance in the corporate arena was super-sized.
     When stocks close at their lows, it’s usually bad news for the next day. Indeed, US stock index futures continued to sink overnight, but have grinded back up to being flat. Of course that doesn’t signal how they will trade during the day. That may be especially true today with a very cautious tone in the markets, as evidenced by Treasury yields being lower and the dollar and yen being stronger as a result of safe haven inflows. The Fed calendar is full again today with Treasury Secretary Powell and Fed Chairman Powell making a return visit to Congress to appear before the Senate Banking Committee this time. They and the other 5 Fed officials at various engagement are probably again try to make the case that a federal relief bill is needed to sustain the economic recovery and pull the economy out of a deep hole. This Congress with its short attention span are finding other shiny things to divert their focus. One of those is the Senate needs to pass the already House-approved continuing resolution of keeping the government open past next Wednesday. Wednesday also brings month-end, quarter-end, which may have some influence filtering into the markets soon as funds and dealer banks begin to window dress holdings and balance sheets. Along with a lot of Fedspeak today, the markets will digest the latest weekly jobless claims data, August’s new home sales, $30 billion 4-week, $35 billion 8-week T-bills, and $30 billion new 7-year T-notes. The claims data isn’t being hyped up as much after a report of massive fraudulent filings for unemployment insurance in California. Stay buckled up for more anticipated market volatility.

GENERAL
TODAY             
PREVIOUS        
FED FUNDS
0.0% to 0.25% 0.0% to 0.25%
1 MONTH LIBOR
0.15113% 0.15188%
S & P 500
3236.92 3315.57
GOLD
1860.70 1897.80
YEN
105.50 105.02
EURO
1.1648 1.1711
WEST TEXAS CRUDE
39.93 39.60
T-BILLS
YIELD                
YIELD                 
3 MONTH
0.08 0.09
6 MONTH
0.09 0.10
1 YEAR
0.11 0.11
T-NOTES / BONDS
YIELD                 
YIELD                  
2 YEAR
0.13 0.13
3 YEAR
0.15 0.15
5 YEAR
0.27 0.27
10 YEAR
0.66 0.67
30 YEAR
1.40 1.42

Data Source: Bloomberg Financial Markets