Daily Market Color

Stocks Reach Record Highs as Treasurys Rally Back

Continued Progress in Labor Data  Data released by the Labor Department today presented further evidence of a strong labor market as the number of job openings in October remained at peak levels.  Coming in just above expectations of 5.5 million and below a revised September reading of 5.63 million, the number of open positions in October was reported at 5.53 million, close to record marks as employers continue to seek qualified employees to fill positions.  The Job Openings and Labor Turnover Survey (JOLTS), reported hiring down slightly from 5.12 million to 5.1 million while the rate of hiring remained steady at 3.5%.  In a measure closely tracked by the Fed, the number of workers who quit their jobs during October also saw minimal change month-on-month, tallying 2.99 million, signaling a significant number of workers continue to feel confident in making the decision to leave their current roles for better job prospects elsewhere.

Stock Indices Touching Record Highs
Both the S&P 500 and DJIA reached all-time highs once again today, despite being weighed down by healthcare and biotechnology stocks, whose prices tumbled following the release of comments made by President-elect Donald Trump in an interview with Time magazine.  Reinforcing promises made during his campaign to push for lower drug costs, Trump declared “I’m going to bring down drug prices, I don’t like what has happened with drug prices.”  Biotech shares on the Nasdaq fell as much as 4% early this morning while the S&P health care index dropped 1.5%. Overall, healthcare stocks in 2016 have declined nearly seven percent. 

Treasury prices rose on the day, bringing yields/swap rates down 1-6bps across the curve in a bull flattening fashion.  The yield on the 10-year Treasury currently sits near 2.35%.  Crude oil prices continued their recent slide, with WTI shedding 1.25% to $50.30/barrel and Brent dropping 0.8% to $53.50/barrel.  The two-day decline has been mainly attributed to the potential for US shale production to offset the agreed upon level of OPEC output cuts. 

India Unexpectedly Holds Rates
Headlines abroad were highlighted by the unexpected decision by the Reserve Bank of India to hold the benchmark repo rate at 6.25%.  Median forecasts had projected a 25-50 bps cut, however the RBI stated its position to keep rates on hold with the US soon expected to tighten and the need for additional data to support an accommodative move.  The decision adds to skepticism surrounding future economic growth in India after Prime Minister Narendra Modi recently took the nation’s two highest currency notes out of circulation, greatly disrupting monetary flows throughout the country.


Ready to start a conversation?

We offer free consultations and platform demos.

Let's Talk