Daily Market Color January 5, 2021Treasury Yields Rise as Markets Wait for Election Results Equities and Treasury yields rise as markets await Georgia election results After a rough start to the year, major equity indices recovered some of their losses – the S&P 500 and DJIA rose 0.7% and 0.6%, respectively. Treasury yields rose across a steepening curve ahead of tonight’s Georgia senate runoff results. The 10-year UST closed 4 bps higher at 0.95%. Results for the Georgia runoff elections are expected later today The incumbent Republican candidates Kelly Loeffler and David Perdue are running against Democrats Rev. Raphael Warnock and Jon Ossoff. Democrats must win both seats up for election in order to gain control of the Senate. December ISM manufacturing index nears a two and a half year high The index, which measures factory activity, rose to 60.7 from 57.5 the month before. According to the report, the pandemic has caused consumer demand to shift from services toward goods, though the virus has been “limiting manufacturing growth potential.” Saudi Arabia pledges to cut crude oil production by 1 million barrels/day starting next month The Saudi Energy Minister Abdulaziz bin Salman commented the cut was made “with the purpose of supporting our economy, the economies of our friends and colleagues, the OPEC-plus countries, for the betterment of the industry.” Oil prices rose sharply after the announcement – US crude rose 4.9% to $49.93/barrel. Key events happening this week Congress will meet tomorrow to count electoral votes and call the Presidential election. FOMC minutes and the ADP employment report will be released Wednesday. Initial jobless claims and international trade figures will be released Thursday. December’s jobs report will be released Friday, which is expected to show a moderate uptick payrolls and unemployment rate.