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Market Brief – Thursday 9/17/20

Volatility spiked in overnight trading sending equity prices lower at the opening bell which lead to a flurry of buying as investors quickly bought the dip. Treasury yields fell in overnight trading which saw aggressive selling in early trading.

Initial jobless claims missed expectations as +860k new claims were filed last week. Continuing jobless claims, which don’t include those on any form of pandemic unemployment assistance, fell by nearly one million to 12.628 million.

Building permits fell -0.9% and housing starts fell -5.1% shocking investors who have been betting on a housing-led recovery.

The Philly Fed Manufacturing Index expanded at a slower rate in September as the diffusion index came in at 15. Business conditions, prices paid, employment, and new orders all expanded in September. More than half of the firms polled expected an increase in production in the third quarter compared to the second quarter. Firms indicated production is approximately 85% of where it was before the pandemic.

Stocks closed lower on the day but managed to gain back some of their early morning losses. Treasury yields also closed lower on the day as buyers stepped in during late trading to push yields lower. Crude oil continued its rally from Wednesday and the dollar closed lower.