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Volatility in US Financial Markets Ensues Following Political Concerns

US stocks fluctuated throughout the day while Treasury prices rose in response to further concerns over the Trump administration’s role in Russia’s involvement in last year’s presidential election.  The latest breakthrough involves a series of emails posted to Twitter by Donald Trump Jr. which document his communication with a Russian lawyer last year.  Specifically mentioned in the post is the Russian government’s support of the Trump campaign and an indication that they possessed damaging emails on Hillary Clinton.  Major US equity indices plunged immediately following the release, but have since recovered to finish near flat for the trading session, partially boosted by the news that the Senate would begin its August break two weeks later than expected in an effort to finalize the health-care bill.  Treasury yields/swap rates are 1-3 bps lower across the curve, bringing the yield on the 10-year note near 2.36%.  The US dollar edged 0.2% lower against major currencies in response to the political development, erasing gains from earlier in the day.  In the energy sector, crude oil futures surged after a report from the Energy Information Administration projected a reduction in US oil production next year, bringing WTI crude to $45/barrel and Brent crude near $48/barrel, both up more than 1.4% for the session.        

The Job Openings and Labor Turnover Survey (JOLTS) headlined a light day for new economic data.  The report from the Labor Department showed job openings in May at the second lowest level of the year at 5.666 million, a 301,000 decline from the previous month’s revised figure and below expectations of 5.950 million.  Despite the decline, the number of job openings remains near a record high, a healthy indicator that employers are continually looking to increase their headcounts.  Additionally, the number of hirings increased by 8.3% to record pace of 5.472 million, narrowing the openings/hirings gap to its lowest in 15 months.   Other details in the report included layoffs, which rose to 1.7 million and the number of workers quitting their jobs, which increased to a post-recession high of 3.2 million. 

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