Daily Market Color

US Stocks, Bonds Climb in Quiet Start to the Week with Economic Data in Focus

US financial markets were relatively quiet to open the week as investors await Fed Chair Janet Yellen’s speech on Wednesday, along with a bevy of data releases on Friday to gain a better picture of the outlook for the economy.  In equity markets, PepsiCo Inc., JPMorgan Chase & Co., Citigroup Inc. and Wells Fargo & Co. will highlight earnings reports throughout the week.  For today’s session, all three major US stock indices traded 0.1%-0.5% higher, led by a rise in technology shares, while Treasury yields/swap rates edged 1-3 bps lower across the curve.  The yield on the 10-year note is poised to finish the day near 2.37%, down 2 bps, after rising more than 9 basis points last week.

This weekend’s G-20 summit in Germany ended without any major resolutions, as US President Donald Trump found himself isolated after holding firm on many of his previously declared stances related to climate control and international trade.  German Chancellor Angela Merkel made a point to mention the disconnect between the US and other members of the summit in the joint statement, saying “The negotiations on the climate issue reflected dissent—everyone against the United States of America. And that the negotiations on the trade issue were especially tough was also a result of the United States taking certain positions.”  The US dollar traded slightly higher on the day against major currencies. 

Crude oil prices fluctuated between gains and losses throughout the day as future production in Libya and Nigeria remains uncertain.  Exempt from the OPEC-led curbing agreement reached earlier this year, the two nations have steadily increased output, offsetting a portion of the cuts made amongst participants in the pact.  In an effort to involve the two African countries in capping production, both Libya and Nigeria have been invited to the OPEC meeting in Russia on July 24th to discuss the stability and outlook of the market.  Regardless of the outcome, output in the US remains a significant barrier in controlling supply and will continue to weigh on crude prices.  Both WTI and Brent are up roughly 0.5% on the day, trading at $44.45/barrel and $46.90/barrel, respectively.     


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