Daily Market Color

Equities Jump to Record Highs After President Biden Signs Stimulus Bill

Equities jump to all-time highs while Treasury yields and swap rates stay in tight range
Short and medium-term Treasury yields and swap rates were rangebound throughout the day though the 30-year UST yield did rise as much as 5 bps to 2.29% after today’s Treasury auction was met with soft demand.  Additionally, President Biden signed the $1.9 trillion stimulus bill into law, pushing major US equity indices to record highs.  The S&P 500 and DJIA jumped 1% and 0.6%, respectively.
CRE struggling to find momentum
Both large and small U.S. banks have struggled to grow their CRE portfolios thus far in 2021. CRE at large banks has contracted at a YTD annualized rate of 2.60%, while small banks have slowly increased at a YTD annualized rate of 1.50%. Both large and small U.S. banks saw deposit outflows WoW, but deposits are expected to increase in the coming weeks as fresh stimulus checks hit recipients’ accounts.
Jobless claims fall to 712,000 from 745,000 the week prior
While the figure remains above pre-pandemic levels, filings have slowed in the recent weeks due to the steady rollout of vaccines.  The four-week moving average is now 759,000.  The Labor Department’s JOLTS report also showed job openings rose to 6.917 million in January from 6.752 million the month prior.
ECB leaves interest rates unchanges and plans to ramp up bond purchases in the coming months
While the central bank chose to leave its Pandemic Emergency Purchase Program unchanged at 1.85 trillion euros ($2.21 trillion) until March 2022, its Q1 bond purchases were lower than expected.  In a statement, the ECB said, “the Governing Council expects purchases under the PEPP over the next quarter to be conducted at a significantly higher pace than during the first months of this year.”

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