Rates Fall Amid Mixed Data

Rates tick lower amid mixed economic data

Today, the bond rally resumed after a mixed bag of economic data – existing home sales rebounded while jobless claims rose.  Treasury yields and swap rates ended the day 1-2 bps lower across the curve – the 10-year UST yield closed 1 bp lower at 1.28%.  Equity indices closed in the green after another batch of solid earnings reports – the S&P 500, DJIA, and Nasdaq gained 0.2%, 0.1%, and 0.4%, respectively.

419,000 jobless claims were filed last week

Weekly jobless claims rose by 1.4% after totaling 368,000 the week prior.  Last week’s level is the highest since mid-May and is nearly double the pre-pandemic average.  The unexpected move higher dampened hopes of a strong labor recovery in the second half of the year.

Existing home sales rose by 1.4% in June

According to the National Association of Realtors, sales of previously owned homes rose from an annual rate of 5.78 million to 5.86 million in June after four straight months of decline.  Compared to June 2020, sales were up by 22.9%.  The inventory of homes for sale has been trending downward for much of the year, which has put pressure on prices.  While supply improved from a 2.5 to a 2.6 month supply, the median price spiked to an all-time higher of $363,300.

Seven-day average of COVID-19 cases now up by 53% from previous week

CDC Director Dr. Rochelle Walensky reported there were 46,318 new cases of the virus reported on Tuesday and that many hospitals are once again reaching capacity.  Infections in Florida, Texas, and Missouri account for 40% of the new cases reported this week.