Stocks rose in overnight trading and the S&P 500 briefly saw new all-time highs in early trading. Treasury yields were up slightly in overnight trading before the CPI report which led to 30-year Treasury yields backing up to 2.2% before declining back to their early morning lows.
Initial claims for unemployment benefits fell last week to +376k. Total claims, including all forms of Pandemic Unemployment Assistance, fell -95k to 15.349 million.
The Consumer Price Index (CPI) rose +0.6% in May and +5.0% from this time last year. Excluding food and energy, Core CPI rose +0.7% in May and +3.8% from this time last year. Real, or inflation-adjusted earnings, fell -0.1% in May.
Today’s $24 billion 30-year Treasury Bond auction was met with strong demand as foreign bidders took 64.0% of the auction and domestic bidders took 18.0% of the auction, leaving securities dealers with 18.0% or $4.314 billion. Treasury yields rose following the auction, then fell back near their intra-day lows.
Stocks and bonds closed higher on the day. Treasury yields continued declining after today’s 30-year Treasury Bond auction leaving investors perplexed on how yields can be falling when consumer prices are rising.