Daily Market Color

Financial Markets Remain Tepid as Irma Approaches, North Korean Tensions Persist

US financial markets traded within a tight range throughout the trading session as investors remained cautious ahead of Hurricane Irma’s US domestic landfall this weekend and the potential for North Korea to test another missile tomorrow in celebration of its “founding day”.  Irma is on track to hit Florida as soon as tomorrow morning and threatens to impact more than 6 million residents across state in addition to billions of dollars in agriculture value.  The category 4 hurricane with winds currently reaching 150 mph is predicted to be the most expensive natural disaster in the history of the US and comes a little over a week after Hurricane Harvey caused an estimated $70 billion-$108 billion worth of damage along the Gulf states.  In a speech given last night, New York Federal Reserve Bank President William Dudley acknowledged that the impact from the storms will make it difficult to assess the short-term health of the economy, and “it’s possible they could have effect on the timing of short-term rate increases”.



US Treasurys experienced a mild selloff, with yields/swap rates up 1-2 bps across the curve.  The yield on the 10-year note is poised to finish the week near 2.05%.  Stock indices are ending mixed for the day, with the DJIA up 0.1%, S&P 500 down 0.15% and Nasdaq 0.6% lower.  Crude oil reversed nearly all of this week’s gains during today’s trading session.  WTI futures declined more than 3% on the day to settle near $47.60/barrel.  The US dollar continued its decline, falling 0.2% against major currencies.



In political news, the House of Representatives successfully voted to pass the deal extending the debt limit, pushing the measure to its final stage of approval by President Trump.  The deal included $15.3 billion of disaster aid for the recovery from Harvey and would effectively fund government operations through December 8th.  The three-month solution was opposed by the GOP leadership who were looking for a much longer budget deficit funding window.        
Our prayers are with all those still recovering from Harvey and everyone being impacted by Hurricane Irma.  We sincerely hope that everyone remains safe and are able to make a swift recovery from the severe destruction caused by the storms.

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