Market Brief – Wednesday 1/12/22

Stocks started the day higher as investors cheered a higher inflation print. Treasury yields initially started the day slightly lower before sellers were pushing yields back up on the belief that inflation will lead to higher interest rates.

Mortgage applications rose +1.4% last week as purchase applications rose +2.2% and refinance applications fell -0.06%.

The Consumer Price Index rose +0.5% in December and +7.0% from this time last year. Excluding food and energy, Core CPI rose +0.6% in December and +5.5% from this time last year. Real, or inflation-adjusted earnings, rose +0.1% in December.

The Department of Energy reported crude oil inventories as Crude -4.553mm (-1.904mm expected), Cushing: -2.468mm, Gasoline: +7.961mm (+2.408mm), and Distillates: +2.537mm (+1.757mm expected).

Today’s $36 billion 10-year Treasury Note auction was met with strong demand as foreign bidders took 65.5% of the auction and domestic bidders took 17.9% of the auction, leaving securities dealers with 16.6% of the auction.

Stocks and Treasury yields closed higher on the day.