Daily Market Color

Rates and Equities Rise Considerably as Congress Continues Stimulus Negotiations

Treasury yields, swap rates little changed after sharp rise yesterday. Rates are mixed to start the day after jumping higher yesterday following the news of President Trump’s improving health and speculation that Congress is progressing towards another round of stimulus. President Trump is said to be “feeling great” and is even considering a televised address to the country now that he’s been released from the hospital. The S&P 500 and DJIA are in the green following yet another endorsement of fiscal action from Fed Chair Jerome Powell while swap rates and Treasury yields are trading sideways- the 10-year Treasury yield remaining at 0.78%.  

House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin met again to continue stimulus negotiations.  The pair met on Monday for over an hour but have yet to reach an agreement on the fiscal stimulus package.  The two are scheduled to meet again later today to continue their final push for a deal.  The $2.2 trillion bill passed by the House last week is still pending a Senate vote and is expected to be met with heavy criticism.  It is unlikely to be voted through as Republicans continue to advocate for a much smaller deal, with Senator John Barrasso, R-Wyo., describing the Democratic proposal as one that “goes way beyond what we need to do to fight coronavirus.”

COVID-19 Update.  Infection numbers continue to grow rapidly in the US, now causing spikes in areas that had previously curbed the spread.  Governor Andrew Cuomo is moving to close schools in 9 NYC areas that are experiencing a rise in infections but will wait to close nonessential businesses.  Mayor Bill de Blasio, however, would like to close nonessential businesses once again but “will follow state law.”  Some less populous states are seeing higher infection rates as well, with Utah hitting a single-day record high of 1,387 on Sunday.  Wisconsin, Indiana, Montana, and Wyoming are also states where cases have risen more in the past week than the entirety of the pandemic.  More White House officials are also reporting positive COVID results, most recently Press Secretary Kayleigh McEnany and former counselor Kellyanne Conway.  Aside from the rising infection rate, the CDC revised their guidance regarding the spread of the virus, now claiming that it can travel beyond six feet in an enclosed space.  The US tally for cases stands above 7.4 million with fatalities nearing 210,000.

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