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Market Brief – Thursday 3/26/20

Stocks quickly erased their overnight losses following the unemployment report, which was the most on record, and rallied in early trading. Treasury yields fell in overnight trading, but rose following the unemployment report, only to fade its move higher in early trading.

Initial jobless claims rose to 3,283k, missing expectations of a 1,650k gain, which is up from 282k the week before. The four-week average for initial claims rose to 998.25k and continuing claims rose to 1,803k.

Excluding autos, retail inventories were flat in February, but in a bit of good news, preliminary wholesale inventories fell -0.5%.

The Kansas City Fed Composite Index fell to -17 in March from 5, and the Kansas City Manufacturing Index fell to -18 from 8 in March.

Today’s 7-year $32 billion Treasury Note auction was met with very strong demand as foreign bidders took 62.4% of the auction and domestic bidders took 9.1% of the auction, leaving securities dealers with 28.6% of the auction. Yields fell following the auction.

With pension funds, institutional money managers and now sovereign wealth funds rebalancing, investors once again have a fear of missing out as they believe this is the bottom of the market. Keep in mind, Bear market rallies can be sold just as fast as they are bought. Keep in mind, computer-controlled programs are likely buying into the frenzy. Treasury yields are not confirming the rally, as yields fell on the day.