Market Brief – Tuesday 7/9/19

Stocks and Treasury bonds headed lower in early trading but buyers on both sides eagerly jumped into to support their positions. In overnight trading, Japan Machine Tool Orders fell -38% on an annualized basis, following last month’s -27.3% annualized drop.

Today’s $38 billion 3-year Treasury auction saw demand fall as foreign bidders took 48.5% of the auction, domestic bidders took 17.9% of the auction, and securities dealers were left with 33.6% of the auction. Yields were flat following the auction.

Both stocks and bonds fought back against their early morning declines as investors anticipate hearing from Fed Chair Powell tomorrow and earnings season kicking off on Monday. Investors on both sides of the fence are hoping to be right.

Agricultural commodities sold off in early trading following yesterday’s USDA crop progress report which showed decent progress on U.S. crops. The report only accounts for the crops that have been planted and doesn’t factor all the land that has gone unplanted. Investors eagerly bought the morning dip and pushed prices above their opening price level.

The American Petroleum Institute reported crude oil inventories as Crude: -8.129mm (-2.5mm expected), Cushing: -754k, Gasoline: -257k, and Distillates +3.69mm. Crude oil prices rose following the report.