Daily Market Color November 25, 2020Rates Trade Rangebound Ahead of Thanksgiving Swap rates and Treasury yields little changed ahead of Thanksgiving After a blockbuster day that saw the DJIA and S&P 500 hit record highs, markets had a quieter session on the day before Thanksgiving. Treasury yields and swap rates traded sideways for much of the day while equity markets pulled back slightly from their records. Despite the pullback, the DJIA is currently on track for its best month since 1987 and has risen roughly 62% from its March low. FOMC minutes signal willingness to adjust bond purchases The Fed’s minutes from their early November meeting showed the FOMC is open to adjusting the level of asset purchases, leaving the door open for further increases to quantitative easing if the economy begins to decelerate amid rising COVID-19 infections. The minutes come as the Treasury has decided to close several government lending facilities, increasing the likelihood of additional asset purchases before year-end. GDP estimates remain steady, economic data shows jobless claims on the rise again This morning’s second estimate for third-quarter GDP showed GDP is still expected to grow at a 33.1% rate. Meanwhile, jobless claims are on the rise once again after trending lower for a few months, claims rising to 778,000 from 748,000. Hope everyone has a happy, safe, and healthy Thanksgiving!
