Daily Market Color

Treasury Curve Flattens Further, Stocks to Record Highs

Historic Levels (Again) in Equity, Bond Markets

Boosted by increases in technology and health-care shares, major stock indices rose to new record highs today, with the S&P 500 topping the round-number milestone of 2,600 for the first time ever.  The Treasury curve flattened further as the spread between 2- and 10-year yields fell an additional 3 bps to a decade-low of 59 bps.  The yield on the 10-year note is down 1bp on the day to 2.36%.  The US dollar declined 0.2% against major currencies, highlighted by a 1% loss against the Mexican peso following news of negotiation progress on the telecom, energy and digital commerce provisions of NAFTA.  In commodities, WTI crude futures reversed the majority of yesterday’s losses, up 0.9% for the trading session to $57/barrel.    



Existing Home Sales Rise, Supply Tightens

A report from the National Association of Realtors today reported a larger-than-expected increase in existing home sales during October, as the hurricanes’ residual negative impact on the housing market continues to fade.  Sales of previously owned homes rose 2.0% (+0.2%e) last month to a seasonally adjusted pace of 5.48 million (four-month high), driven largely by gains in the South.  Additionally, the median house price in the US remained robust at $245,100, up 5.5% YoY, as declines in supply continue to support home sale prices.  Compared to a year earlier, supply was down 10.4%, marking the 29th consecutive month that inventories were down on an annualized basis. The average time a home was on the market also held near historically low levels, coming in at 34 days during October (41 days one year ago).



President of Zimbabwe Resigns After 37 Years

Earlier today Robert Mugabe stepped down as President of Zimbabwe, officially ending the term of the world’s oldest head of state.  Mugabe had been serving under house arrest for the past six days after the military seized control over the nation, a move that was triggered when Mugabe fired one of his closest allies in Vice President Emmerson Mnangagwa two weeks earlier.  The sacking was viewed as a backdoor way to position his wife as the next in-line to the presidency, as Mugabe’s health was deteriorating at 93 years of age.  The ruling Zimbabwe African National Union – Patriotic Front (ZANU-PF), is expected to name Emmerson Mnangagwa, nicknamed the “Crocodile” for his violent ways of dealing with conflict in the past, as its new leader.        


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