Another Bad Signal From the Bond Market

What’s in Today’s Report:

  • Why Another Bond Auction Caused Yesterday’s Decline
  • The Next Catalyst for Markets (Coming This Sunday)

Futures are slightly higher following a positive U.S/China trade article and better than expected EU economic data.

EU Money Supply (M3) rose 4.1% vs. (E) 3.9%, delivering the first upside economic surprise in Europe in some time.  And, while M3 isn’t exactly a widely followed report, at this point we’ll take what good data we can get from Europe.

On trade, a Reuters article stated Chinese officials have made new concessions on IP rights and tech transfers which represents an incrementally positive step, although other issues still need to be resolved before there is a an official deal.

Today there are some notable economic reports including Final Q4 ‘18 GDP (E: 2.2%), Jobless Claims (E: 225K), and Pending Home Sales (E: -1.0%) but none of them should move markets unless there are major surprises.  Similarly, there are numerous Fed speakers, Quarles (7:15 a.m. ET), Clarida (9:30 a.m. ET), Bowman (10:00 a.m. ET), Bostic (11:30 a.m. ET) and Bullard (6:20 p.m. ET), but again they shouldn’t move markets, either.

So, we’ll be watching bond yields as the key to whether stocks can resume the rally.  If bond yields (Treasury yields and Bund yields) can move higher today, then likely so can stocks