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Rates End Day Unchanged as Congressional Republicans Push Back on Stimulus

Treasurys pare losses after Congressional Republicans push back on Janet Yellen’s calls for additional stimulus
During her confirmation hearing to become Treasury secretary, former Fed Chair Janet Yellen encountered strong resistance to her support for additional coronavirus relief spending. Yellen added that she backs a stable and strong dollar and believes that “intentional targeting of exchange rates to gain commercial advantage is unacceptable.”  Congress is expected to vote on her confirmation on Thursday. Treasury yields and swap rates, which had climbed as much as 3bps, fell lower to end the day little changed. Meanwhile, risk assets closed higher– the S&P 500 and DJIA rising 0.8% and 0.4% respectively. 
Bank earnings season continues with Goldman Sachs and Bank of America reporting today
Goldman Sachs reported their revenue grew by $11.74 billion, about $1.75 billion higher than forecasted.  Much of the growth was driven by trading revenue, which hit a 10-year high in 2020. Bank of America’s earnings fell 22% in Q4, as its profits fell to $5.47 billion versus $6.99 billion a year earlier.  The bank’s net interest income fell 16% from a year earlier after record low interest rates continued to cut into margins. 
SBA re-opens PPP to all participating lenders today
The second round of federal funds opens $284.5 billion for PPP loans, with $137 billion set aside specifically for “second-draw” loans for businesses require additional funding beyond their initial loan.  The SBA modified some of their eligibility requirements and has capped first-time and second-draw loans to $10 million and $2 million, respectively.

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