Daily Market Color March 9, 2021Treasury Yields Turn Lower Ahead of House Stimulus Vote Bond selloff on pause In the first of three auctions, the Treasury sold $58 billion in 3-year notes today, which was met with strong demand. A $38 billion auction of 10-year notes will follow tomorrow with a $24 billion sale of 30-year bonds on Thursday to close out the week. Treasury yields and swap rates fell 1-6 bps across the curve – the 10-year closed 6 bps lower at 1.52%. Nasdaq rises most in 4 months The pullback in yields gave technology stocks a chance to recover – Tesla shares jumped almost 20% on the day. The risk-on move pushed major US equity indices higher – the S&P 500 and DJIA climbed 1.4% and 0.1% while the Nasdaq rose 3.7%, its biggest rally since November. February NFIB small business optimism index rose to 95.8, up from 95.0 last month While harsh weather conditions and COVID-19 regulations tempered business activity, small business optimism is on the rise – though the figure is still below pre-pandemic levels (~98.0). February CPI is expected to rise 0.4% Rising gas prices are expected to be the main driver. Core CPI, which exlcudes food and energy, is expected to rise only 0.2%, as the COVID-19 fallout is expected to temper inflationary pressures.
