Daily Market Color July 29, 2021Yield Curve Steepens with Positive Economic Data Yields increase across the curve as equities hit all-time highs Low jobless claims and strong household spending data combined to push swap rates and Treasury yields higher across a steepening curve. The 10-year Treasury yield ended the day 4 basis points higher while the spread between 2-year and 10-year rates widened out to 1.06%. All three major equity indices rallied on the day with the DJIA and S&P touching record highs during trading. Second-quarter GDP misses estimates Second-quarter GDP expanded by an annualized 6.5%, missing economists’ expectations of 8.4%. The miss was attributed to supply-chain issues that offset the strong gains in household demand with personal consumption growing at an annualized rate of 11.8% during the quarter. Initial jobless claims fall near pandemic low U.S. initial jobless claims fell last week to 400,000 as the labor market continues to show improvement. The spread of the COVID delta variant and slowing vaccinations could pose a risk to the labor market if local economies renew restrictions.
