Market Brief – Thursday 5/14/20

Stocks and Treasury yields started the day lower after investors were uneasy following an interview with President Trump where he stated he could “cut off the whole relationship” when referring to China. Crude oil traded higher ahead of the June contract expiry next Tuesday where 170 million barrels of crude oil are expected to be delivered without the storage capacity to hold all of them.

Initial jobless claims missed expectations by coming in at 2,981k but the four-week moving average for jobless claims fell to 3,616.50k. Continuing claims remain high at 22,833k as many Americans are still struggling to get their claims processed.

Export prices fell -3.3% in April and -7.0% from this time last year. Import prices fell -2.6% in April and -6.8% from this time last year. The U.S is now exporting and importing deflation.

Investors bought stocks on the news nearly three million Americans filed for unemployment claims, which pushed all three of the major indices into the green after starting in the red. Treasury yields closed lower, but sellers pushed back as they continue to believe inflation is coming when the data clearly shows deflation is coming. Crude oil also closed higher, indicating investors are either unaware of the June futures expiry next week or demand has returned.