Daily Market Color

Rates Rise After Jobless Claims Drop to a Pandemic Low

Jobless claims fall to post-pandemic lows- pulling rates and equities higher
Market sentiment improved after initial jobless claims fell more than expected and President Biden revised his COVID-19 vaccine goal to 200 million doses during his first 100 days in office.  Major US equity indices recovered after two straight days of losses – the S&P 500 and DJIA closed 0.5% and 0.6% higher, respectively.  Treasury yields and swap rates rose across the curve – the 10-year UST yield closed 2 bps higher at 1.63%.
Jobless claims fall to a pandemic low
Claims filed last week fell to 684,000 from 781,000 the week prior.  The figure dipped below the 700,000 threshold for the first time since the start of the pandemic.
Q4 2020 GDP revised to 4.3% from 4.1%
The third and final estimate of Q4 2020 GDP was revised higher after business investment in inventory and residential housing was more than expected  Exports also rose 22.3% from 21.8% while the increase in consumer spending fell to 2.3% from 2.4%.  PCE price index for Q4 rose 1.5% while core PCE rose 1.3%, falling below the Fed’s 2% threshold. 
Senate extends SBA’s PPP by two months
The program deadline has been extended from March 31st to May 31st.  The bill, called the PPP Extension Act of 2021, will be sent to President Biden to be signed into law.  February’s program changes, like the two-week priority application window for businesses with less than 20 employees and updates to eligibility for loan forgiveness, will stay in place.

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