Yield Curve Update: Negative Trend Break

What’s in Today’s Report:

  • Bottom Line: Did Something Good Happy Yesterday?
  • Yield Curve Update: Negative Trend Break

Stock futures are little changed this morning as investors digest new Fed chatter and more trade war jawboning.

Fed Chair Powell said he saw the “glass as much more than half full” regarding the current expansion and reiterated that rates will remain unchanged until inflation rises materially.

U.S. and Chinese trade negotiators spoke on the phone overnight to discuss “core issues” and reported that they have reached a “common understanding on resolving relevant problems” but no concrete progress was made and the status of phase-one remains unknown.

There are a few potential catalysts to watch today including economic releases: International Trade in Goods (E: -$70.0B), S&P Corelogic Case-Shiller HPI (E: 0.3%), New Home Sales (E: 707K), and Consumer Confidence (E: 126.8) as well as one Fed speaker: Brainard (1:00 p.m. ET).

Additionally, there is a 5-Year Treasury note auction today at 1:00 p.m. ET and with the yield curve coming back into focus, any wild swings in the belly of the curve could move stocks (remember we want to see the 10s-2s steepen due to a rising 10-year yield).

Aside from those scheduled events, speakers and reports, the market will clearly remain very sensitive to anything regarding the relationship between the U.S. and China as the trade war remains the single most important influence on this market right now.