Wednesday May 10

Stocks put in a mixed day as investors continue to digest economic data, political headlines, and corporate earnings. The S&P 500 rose 0.1% to 2,399 and the Dow Jones fell 0.2% to 20,943. The KBW Bank index was up 0.2% while the DJ Utility average rose 0.1%. Today investors digested political news involving Trump’s firing of James Comey. The possibility of political fallout could damage Trump’s ability to pass economic reforms related to taxes and fiscal spending. Investors have to weigh that possibility every time there is political risks. Economic data today showed that import prices and export prices each rose by more than expected which is a sign of price pressure. The EIA Petroleum Status Report showed that crude oil inventories fell 5.2 million barrels which is a notable draw down on inventories which should provide at the very least some support amid the current selloff. That marks the fifth consecutive week of declining oil inventories. Eric Rosengren spoke today and came across as hawkish on rates and the balance sheet.  The VIX rose above 10 finishing the day at 10.02. According to CME group the market for Fed funds futures reflects a 88% chance of a 25bp hike in June. The two year Treasury yield rose 1bp to 1.35%. The ten year Treasury yield rose 1bp to 2.41%. 2yr vs 10yr was unchanged at 1.06%. The US dollar strengthened against most peers as analysts comment that short term rate differentials are bullish for the dollar. USD rose 0.1% against EUR to $1.0869. USD rose 0.2% against JPY to Y114.22. USD fell 0.1% against GBP to $1.2946. Oil prices were stronger on the day on the bullish EIA data. WTI rose 3.3% to $47.38. Brent rose 3.1% to $50.25 eclipsing the $50 threshold.

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Wednesday May 10

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