Daily Market Color

Equities Extend Streak, Dollar Continues to Struggle


Equity markets rallied again today, as the S&P posted its best 5-day performance since 2011.  Overall, all three major US indices posted gains of 1.2%-1.5% on the day with the continued strength of the economy as reflected in recent economic data releases. The yield on the 10-year Treasury note remained near its four-year high, holding within a tight range throughout the trading session and closing right around 2.90%. The US dollar continued its slide, slumping 0.5% against major currencies to a new three year low.  In commodities, WTI crude futures climbed 1.7% for the trading session to $61.60/barrel, due in part to the continued weakness of the dollar.



Economic news was highlighted by January’s producer price index data, including PPI final demand which showed a strong rebound of +0.4% after being flat in December.  The 0.4% reading matched market expectations and provided reaffirmed yesterday’s CPI data in favor of steadily rising prices in the US.  Much of the increase was attributed to a 3.4% jump in energy prices, notably gasoline and jet fuel. The core PPI exceeded median forecasts of +0.2%, and was reported at +0.4% MoM.  Looking at producers’ inflation over the past year, overall producer prices have increased 2.7% while core prices have risen 2.5%.    



Other key economic data releases included a report from the Labor Department which showed initial jobless claims in the US remaining near 45-year low levels.  The number of new claims for the week ended February 10th climbed 7,000 to a seasonally adjusted 230,000 (228,000 expected), and the four-week moving average of claims rose by 3,500 to 228,500.  Also detailed in the report, the number of continuing claims increased by 15,000 to 1.942 million for the week ended February 3rd.             


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