Global stock markets are rallying today; it began in China and continued around the world with gains in most all equity markets. The DJIA at 8:00 am ET this morning +452, NASDAQ +132, S&P +40., and the 10 yr 0.70% +3 bps. International stocks and US futures rallied on hopes for a strong recovery from the coronavirus pandemic and a signal from Chinese state media suggesting investors should support a local bull market. The holiday weekend has done nothing to slow the positive momentum for US stocks. Strong US jobs data buoyed investors last Thursday. US payrolls added 4.8 million workers last month, lowering the unemployment rate to 11.1%. However, the data relies on surveys conducted before a sharp increase in coronavirus infections in late June, and the surge could reverse the employment trend.
The US death toll is now at 130K. In Arizona, nearly 90% of the state's intensive-care unit beds are in use, according to the state's Department of Health, up from between 60% and 70% throughout March and April. Hospitalizations in Texas continued to climb over the weekend; 8,181 confirmed Covid-19 patients were in the state's hospitals as of Sunday afternoon. The rise has pushed some hospitals to full or near-full capacity for the most critical patients. Some Florida hospitals also reported near-full intensive-care units, state data show.
At 9:30 am ET, the DJIA opened +346, NASDAQ +155, S&P +42. 10 yr note 0.70% +3 bps. FNMA 2.5 30 yr coupon at 9:30 -5 bps from Thursday's close and -3 bps from 9:30 Thursday morning.
At 10:00 am ET, June ISM non-manufacturing index, expected at 51, surprisingly increased to 57.1, well above forecasts and indicated expansion at a level that existed before the pandemic.
This week's calendar is thin; two reports of significance; today's June ISM non-manufacturing index and Friday's June PPI. Treasury will auction 94B of notes and bonds, 3s, 10s, and 30s.
Still no noticeable change in mortgage rates, as the driver, the 10 yr note, sits flat now for the last 4 months.
This Week’s Calendar:
10:00 am ET June ISM non-manufacturing index (expected at 51
from 45.4, as released 57.0)
8:30 am ET May JOLTS job openings
1:00 PM ET $46B 3 yr. note auction
7:00 am ET weekly MBA mortgage applications
1:00 pm ET $29B 10 yr. note auction (29 yr-10 mo.)
3:00 pm ET May consumer credit (-$20.0B)
8:30 am ET weekly jobless claims (1.375 mil from 1.427 mil prior week)
10:00 am ET May wholesale inventories (-1.2%)
1:00 pm ET $19B 30 yr. bond auction (29 yr-10 mo.)
8:30 am ET June PPI (+0.4%, core PPI +0.1%)
PRICES @ 10:00 AM ET
10 yr. note: 0.70% +3 bp
5 yr. note: 0.31% +1 bp
2 Yr. note: 0.15% -1 bp
30 yr. bond: 1.47% +3 bp
Libor Rates: 1 mo. 0.162%; 3 mo. 0.275%; 6 mo. 0.366%; 1
yr. 0.505% (7/3/20)
30 yr. FNMA 2.5: @9:30 104.14 -5 bp (-3 bp from 9:30 Thursday)
30 yr. GNMA 2.5: @9:30 104.81 -11 bp (+1 bp from 9:30 Thursday)
Dollar/Yuan: $7.0190 -$0.0474
Dollar/Yen: 107.49 -0.03 yen
Dollar/Euro: $1.1344 +$0.0096
Dollar Index: 96.60 -0.57
Gold: $1797.40 +$7.40
Crude Oil: $40.27 -$0.38
DJIA: 26,195 +368
NASDAQ: 10,395 +188
S&P 500: 3171 +41