FinSer 

  Financial Focus
April 12, 2024
          

    GOOD MORNING! A mixed March Producer Price Index (PPI) report seemed to let the dust settle a little bit in the markets following the CPI-induced sell-offs on Wednesday. That and claims for unemployment benefits remaining low supported stocks that a healthy labor market would keep the economy moving forward. Treasuries widely/wildly gyrated between a relief trade as the PPI report wasn’t as bad as feared and relief that supply is over for a while and re-assessing and re-pricing Fed expectations. The yields on longer maturities lagged those in the short-to-intermediate range, causing the yield curve to steepen as Treasuries ended narrowly mixed. In turn, it didn’t help the 30-year T-bond auction, which was just so-so. Diverging opinions by Fed officials became more apparent as comments ranged from CPI was just another bump in the path to lower inflation to concern that inflation’s journey has stalled. Most signaled, however, that rate cuts weren’t imminent in the near future and there might not be as many as previously thought. Fed’s messaging is a mess right now, leaving the markets dazed and confused. The stronger dollar caused a minor pullback in commodities, except for gold and silver. The precious metals are soaring on volatility in the currency markets.
     Another moving part comes into play today with the start of earnings season. It starts with big banks with JP Morgan, Citi and Wells Fargo reporting before the opening bell. Early trading is feeling some risk-off sentiment ahead of the earnings and the potential attack by Iran over next 2 days according to a report by the Wall Street Journal. The latter is boosting oil in early morning trade. Treasury prices are also higher as investors seek a safe haven going into the weekend. Stock index futures are mixed and trade with a cautious tone.

 

GENERAL
TODAY             
PREVIOUS        
FED FUNDS
5.25% to 5.50% 5.25% to 5.50%
S & P 500
5199.06 5160.64
GOLD
2416.80 2352.80
YEN
153.32 153.13
EURO
1.0652 1.0728
WEST TEXAS CRUDE
85.02 86.21
T-BILLS
YIELD                
YIELD                 
3 MONTH
5.38 5.38
6 MONTH 5.34 5.36
1 YEAR
5.15 5.17
T-NOTES / BONDS
YIELD                 
YIELD                  
2 YEAR
4.92 4.95
3 YEAR 4.75 4.78
5 YEAR 4.58 4.59
10 YEAR
4.52 4.54
30 YEAR 4.63 4.63
                                                         Data Source: Bloomberg Financial Markets