Market Snapshot April 10, 2018

People Looking Choosing at Colleagues Photo

Good Tuesday A.M.,

 

Only real data news today was the PPI for March. It came in a bit hotter than expected, but markets typically don’t react to price increases at the producer level (although I never really got why, as there is a high correlation to price increases at the consumer level… but that is for another time). We will get CPI tomorrow and the minutes from the last Fed meeting. I won’t be surprised if CPI will show similar increases. CPI increases = higher inflation = a bad day for bonds so just be aware, we’re back on defense.

 

Today’s data:

 

  • Index: Actual 0.3%, Consensus 0.1%, Last 0.2%.
  • Core: Actual 0.3%, Consensus 0.2%, Last 0.2%.

 

Bonds are holding up well, considering the DOW is up 360 points. The 10-yr at 2.79% and mortgage bonds -6bps on the day. The DOW is up because China has taken steps to soften the potential of a trade war. President Xi Jinping stated that China will reduce tariffs on imported autos and that they will work to protect the intellectual property rights of foreign firms. This is big and is calming down markets.

 

Make today great!