Market Brief – Tuesday 10/6/20

Stocks and Treasury yields were flat in overnight trading as investors hoped Fed Chair Powell would announce more monetary candy during a prepared speech this morning. Stocks were slightly up in early trading and Treasury yields traded a bit higher as 30-year Treasury yields were up to 1.6%.

Redbook same-store weekly brick-and-mortar retail sales were flat last week at 0.0% and rose +2.1% from this time last year.

The Job Openings and Labor Turnover Survey (JOLTS) missed expectations as employers pulled job postings. The survey showed 6.493 million job openings for August, down from 6.697 million the month before.

Today’s $52 billion 3-year Treasury Note auction was met with strong demand as foreign bidders took 55.7% of the auction and domestic bidders took 12.6% of the auction, leaving securities dealers with 31.7% of the auction or $16.483 billion. Treasury yields rose following the auction.

Stocks and Treasury yields tanked after President Trump announced he has instructed his representatives to halt all negotiating for another round of stimulus until after the election. Calling his bluff, investors bought the dip.

Stocks closed lower as the dip buyers quickly turned into sellers. Treasury yields closed lower on the day ahead of what will likely be strong 10- and 30-year bond auctions this week as investors face the possibility of no further stimulus until next year.