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Market Brief – Thursday 10/15/20

Stocks fell in overnight trading and as soon as the opening bell rang, buyers came in to buy the dip sending stock prices higher in early trading. Treasury yields fell in overnight trading bringing sellers in at the opening bell who drove yields higher in early trading.

Initial jobless claims missed expectations as 898k new claims were filed last week even though continuing claims fell as workers transition from state benefits to Federal benefits. Total claims from all forms of benefits fell slightly from 25.505 million to 25.290 million last week.

Export prices rose +0.6% in September and improved to -1.8% from this time last year. Import prices rose +0.3% in September and improved slightly to -1.1% from this time last year. While both improved on a year-over-year basis, the U.S. is exporting and importing deflation.

The New York Empire Manufacturing index continued to expand in October but at a slower rate than September. The Philadelphia Fed Manufacturing index expanded at a faster rate in October than in September. Both manufacturing indices show a continued recovery in the manufacturing sector.

The Department of Energy reported crude oil inventories as Crude: -3.818mm (-2.835mm expected), Cushing: +2.906mm (+3.923mm expected), Gasoline: -1.626mm (-1.607mm expected), and Distillates: -7.244mm (-2.096mm expected). Crude oil rose following the report.

Investors eagerly bought the dip and bid stock prices back up to near their prior-day closing values without any news to drive the tape. Sellers drove Treasury yields back up to just over 1.5% while the dollar rallied.