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Market Brief – Wednesday 9/16/20

Stocks rose in overnight trading despite a weaker-than-expected retail sales report as investors hope for more monetary candy from the Fed. Treasury yields fell in overnight trading alongside the dollar, while crude oil rose in advance of today’s EIA inventory report.

Mortgage applications fell -2.5% last week as purchase applications fell -0.5% and refinance applications fell -3.7% despite record-low mortgage rates.

Retail sales rose +0.6% in August, missing expectations, and rose +2.57% from this time last year. Excluding food and energy, core retail sales rose +0.7% in August, retail sales excluding gas and autos rose +0.7% in August, and the retail control group, which feeds into the GDP calculation, fell -0.1% in August.

The Department of Energy reported crude oil inventories as Crude: -4.389mm (+1.271 mm expected), Cushing: -74k (+2.242mm expected), Gasoline: -381k (-160k expected), and Distillates: +3.461mm (+600k expected). Crude oil fell following the report.

Fed Chair Powell did not annouce any changes to monetary policy and based on forward guidance, indicated monetary policy would stay accommodative for several years.

After ramping higher during Powell’s press conference, stocks turned lower and closed in the red for the day. Treasury yields rose on inflation fears as Powell indicated interest rates would remain low well into the recovery. Crude oil and the dollar rallied to close higher on the day.