Daily Market Color February 19, 2021Rates Rise (Again) to Closeout Week Yield curve continues to steepen, 10yr UST yield nears 12-month high The 10yr yield continued its rise, increasing 5bps on Friday to 1.34% — it is now up 43bps since the start of 2021. In equity markets, major indices held near flat on the day as the rotation out of tech shares and into cyclical names continued. U.S. existing home sales rise to three-month high Previously owned U.S. home sales unexpectedly rose in January to a three-month high. Low borrowing costs coupled with increasing interest in single-family homes has fueled demand since the onset of the pandemic. Contract closings increased 0.6% from December to an annualized 6.69mm, above the median forecast of 6.6mm. February U.S. business prices increase to highest levels since 2015 IHS Markit data revealed higher raw materials and supply-chain costs, while also showing strengthening demand at service providers and manufacturers. The composite index of business activity increased to 58.8, up from 58.7 in January. A reading above 50 indicated growth. Bitcoin market value hits $1 trillion for first time Bitcoin has added more than $450 billion of value in 2021 reaching $1 trillion in total market value. Partly fueling the increase in Bitcoin’s value has been Tesla’s $1.5 billion investment into the cryptocurrency and MicroStrategy Inc increasing its sale of convertible debt to $900 million to buy more of the digital asset.
