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Market Brief – Tuesday 2/11/20

Stocks rose in overnight trading on hopes for more stimulus from China and on further news the Eurozone’s manufacturing sector is contracting. Global government bond yields also rose last night, and crude oil surged to near $51 per barrel. Stocks continued to rise in early trading on hopes Fed Chair Powell would indicate more stimulus is coming during his testimony to Congresses this morning.

Great Britain’s industrial production rose +0.1% in December but fell -1.8% from this time last year and its manufacturing production rose +0.3% in December but it fell -2.5% from this time last year. For the fourth quarter, Great Britain’s GDP growth came in at 0.0%. The bright spot in the data was construction output which rose +0.4% in December and +5.0% from this time last year.

Redbook same-store weekly sales fell -0.7% from this week last year and slowed to +4.8% from this time last year.

The December Job Openings and Labor Turnover Survey (JOLTS) missed estimates of 7 million openings by falling to 6.423 million openings. Job openings fell -14.1% from this time last year, which hasn’t happened since the onset of the last recession.

The New York Fed accepted bids for $37.915 billion of overnight dollar loans and offers for $30 billion of 14-day term dollar loans against bids of $53.65 billion, making this the third oversubscribed term loan this year. The New York Fed also purchased $3,001 billion of Treasury Bills against bids of $26,623 billion.

Today’s 3-year $38 billion Treasury Note auction was met with strong demand as foreign bidders took 43.9% of the auction and domestic bidders took 18.1% of the auction, leaving securities dealers with 38.0% of the auction. Treasury yields were flat following the auction.

Stocks were lat on the day after giving back most of their overnight ramp. Treasury yields closed higher, but bond Bulls stepped in to put a halt to the selloff. Crude oil was unable to hold its overnight gains and closed under $50 per barrel ahead of the API inventory report.

The American Petroleum Institute reported crude oil inventories as Crude: +6.0mm (+3.0mm expected), Cushing: +1.3mm (+2.3mm expected), Gasoline: +1.1mm (+500k expected), and Distillates: -2.3mm (-600k expected). Crude remained below $50 per barrel following the report.