Good Afternoon on this Wednesday and best day of the week,
Bonds are continuing their pullback and are now at a key point and need to hold. Today’s news was mixed, and I would say slightly more bond-friendly than not. We should always expect pullbacks during a rally, and unfortunately, when we broke above the downward channel on the ten-year yield, it likely put an end to our rally. We may now test 3% again as the 10-yr is at 2.92 (up 20bps in 3days).
Some food for thought (courtesy of the WSJ):
U.S. home-price growth rose to a new record in March as robust demand outweighed the limited supply of homes for sale. The S&P CoreLogic Case-Shiller National Home Price Index, which measures average home prices in major metropolitan areas across the nation, rose 20.6% in the year that ended in March, the highest annual rate of price growth since the index began in 1987. The inventory of existing homes on the market in March sat well below normal levels for that time of year, making it difficult for buyers to compete and pushing prices higher. While higher mortgage rates have started to deter some buyers, home prices remain sky high as demand continues to exceed supply. Economists say the rate of home-price growth is likely to slow by the end of the year, Nicole Friedman reports.
Millions of Americans hit the road over Memorial Day weekend, with record-high gas prices pinching their wallets. Analysts said gasoline prices so far haven’t changed many motorists’ summer plans, in part because of pent-up demand for travel after Covid 19-related restrictions. Still, some motorists say they are reconsidering summer road trips. A survey by AAA in March found that two-thirds of Americans felt gas was too expensive when it was at $3.53 a gallon; if it were to reach $5—which has happened on the West Coast—three-quarters of drivers said they would need to adjust, Hardika Singh reports.
Please remain safe and healthy, make today great.