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Market Brief – Wednesday 3/25/20

Stocks were volatile in early trading but heading higher as pension funds and large institutional money managers continue to buy stocks and sell bonds to rebalance their portfolios going into the quarter-end. Treasury yields were lower in early trading as the Fed continues its massive purchase program.

Mortgage applications fell -29.4% over last week as homeowners are forced to stay home and banks are running out of money for mortgages. Purchase applications fell -14.6% and refinance applications fell -33.8%.

Durable goods orders rose +1.2% in February. Excluding transportation, core durable goods orders fell -0.6% in February. Excluding defense spending, durable goods orders rose +0.1% in February. Durable goods non-defense, non-aircraft orders fell -0.8% in February.

Housing prices rose +0.3% in January and +5.2% from this time last year.

The Department of Energy reported crude oil inventories as Crude: -1.623mm (+2.774mm expected), Cushing: +858k, Gasoline: -1.537mm (-657k expected), and Distillates: -679k (-1.886mm expected). Crude oil fell following the report.

Today’s 5-year $41 billion Treasury Note auction was met with strong demand as foreign bidders took 52.1% of the auction and domestic bidders took 12.6% of the auction, leaving securities dealers with 35.3% of the auction. Yields fell following the auction.

After rallying most of the day, stocks gave back most of their intra-day gains in the last twenty minutes of trading. After 30-year Treasury yields almost broke 1.3%, sellers came to push yields higher ahead of tomorrow’s unemployment numbers, which are likely to be off the charts.