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Market Brief – Friday 10/16/20

Stocks came flying out of the gate as investors continue to buy into stimulus optimism even as the window for a stimulus bill is quickly closing. The opening bell ramp didn’t hold as stocks were trending lower in early trading. Treasury yields rose in overnight trading on the same news and were pushed a bit higher in early trading until buyers started pushing yields back down.

Retail sales rose +1.9% in September and an impressive +5.36% from this time last year as the pandemic has not slowed spending. Excluding food and energy, core retail sales rose +1.5% in September and the retail sales control group, which feeds into the GDP calculation, rose +1.4% in September.

Industrial production fell -0.6% in September and fell to -7.28% from this time last year as the stimulus is not leading to a rebound in industrial production. Manufacturing production fell -0.3% in September and the Capacity Utilization rate fell slightly to 71.5% in September.

Stocks closed in the red for the day as the last hour of trading saw more sellers than buyers. Treasury yields closed higher on the day but 30-year Treasury yields were unable to pierce their 200-day moving average as they closed just below the key technical level.