Daily Market Color July 23, 2021Rates Rangebound to End Choppy Week Rates trade in a tight range to close out the week After a choppy week of trading, Treasury yields and swap rates ended the day slightly lower – the 10-year Treasury yield closed flat at 1.28%, almost 15 bps above the five-month low it reached on Tuesday. Major equity indices continued to march higher – the DJIA and Nasdaq climbing 0.7% and 1%, respectively. After its biggest one-day decline since May on Monday, the S&P 500 closed 1.1% higher on the day and almost 2% for the week. PMI composite index fell to a four-month low in July According to the IHS Markit report, business activity in in the US cooled in July, the PMI composite level declining to 59.7 from 63.7 in June. The manufacturing index also rose from 62.1 to 63.1, while the services index fell to a five-month low of 59.8 from 64.6. The report detailed, “Businesses are battling shortages of raw materials and labor, which are fanning inflation, in the aftermath of the economy’s reopening after severe disruptions caused by the COVID-19 pandemic. The survey’s findings fit in with economists’ views that growth will slow after accelerating in the second quarter, thanks to massive fiscal stimulus.” What to watch for next week All eyes will be on the FOMC meeting beginning on Tuesday with the announcement scheduled for Wednesday afternoon. Next week will also be very data-heavy, with June durable goods on Tuesday, GDP and jobless claims on Thursday, and June consumer spending and core inflation due on Friday.