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Market Brief – Wednesday 9/23/20

Stocks were mixed in overnight trading while Treasury yields were flat. Stocks were heading lower in early trading and Treasury yields higher, as investors continue to dump Treasuries in early trading as they have over the past two weeks. Despite investors selling Treasuries, they have not been able to successfully push 30-year Treasury yields over 1.45%.

Mortgage applications rose +6.8% last week with purchase applications rising +3.4% and refinance applications rising +8.8% as homeowners look to take advantage of low mortgage rates.

Home prices rose +1.0% in July and +6.5% from this time last year.

The preliminary Markit Composite PMI showed a slight expansion at 54.4 with the Manufacturing PMI in a slight expansion at 53.5 and Services PMI in a slight expansion at 54.6.

The Department of Energy reported crude oil inventories as Crude: -1.639mm (-2.325mm expected), Cushing: +4k (+28k expected), Gasoline: -4.025mm (-648k expected), and Distillates: -3.363mm (+1.020mm expected). Crude oil rose following the report.

Today’s $53 billion 5-year Treasury Note auction was met with decent demand as foreign bidders took 61.9% of the auction and domestic bidders took 17.4% of the auction, leaving securities dealers with 20.7% of the auction or $10.954 billion. Treasury yields were flat following the auction.

Stocks closed lower on the day as persistent selling sent stocks lower throughout most of the trading day. After being slammed higher, Treasury yields managed to close lower on the day. The dollar showed signs of breaking out of its consolidation range.