Daily Market Color January 26, 2023Markets Risk-On in the Face of Mixed Data Equities rise, bonds sell-off. Markets adopted a risk-on sentiment today, as the S&P 500 and NASDAQ climbed 1.10% and 1.76%, respectively, while Treasurys fell. The move came amid the release of mixed data, including personal consumption and durable goods orders. Durable goods orders came in at 5.6% after being forecasted at 2.5%, a major increase from last month’s revised level of -1.7%. The beat fueled some of the Treasury yield increase, the 2-year and 10-year yields rising by ~6bps and ~5bps, respectively. Today’s data releases send mixed signals. Today’s slew of data releases included Quarterly Core PCE, which was in line with expectations at 3.9%, and lower than 3Q22’s 4.7% reading. This comes alongside a monthly increase in Wholesale Inventories of 0.1%, below the 0.5% estimate and last month’s 1.0% print. Viewed in isolation, these data points send deflationary signals about the economy. The message was convoluted, however, by figures such as initial jobless claims, which came in lower than the 205,000 estimate at 186,000, and below last month’s 190,000 reading. Day ahead. Core PCE will be released at 8:30 AM ET, which is expected to increase to 0.3% after coming in at 0.2% last month. Personal income and spending data will also come out at 8:30 AM, where slight increases from last month’s levels are expected. Pending home sale data will follow at 10 AM.
