A Reversal of Fortune?

Equities are poised to open back in the green after yesterday’s epic sell-off while the Treasury market gives up some of its gains. Yesterday’s fear of an increase in viral infections and the possibility of a second wave have faded along with elevated concerns over future economic malaise. How quickly the worm turns!

For this morning’s data, a report just released shows that, in May, Import Prices rose by a greater-than-expected 1.0% after April’s slide of 2.6%. Year-over-year, that measure has cratered by 6%, underscoring the deflationary impact of economic lockdown. For exports, the Export Price Index rose, as expected, by 0.5%, reversing April’s dip of 3.3%. A little later today, the University of Michigan will preliminary report the results of its Consumer Sentiment survey for May.

In the meantime, the Ten-Year’s yield has risen to the threshold of 70 basis points as the DJIA may starting trading as high as 500 points above yesterday’s close. The Long Bond’s yield is up about 5 basis points to around 1.45%. Crude oil is holding pretty steady at around $36.50 while gold has slipped $12 to $1,740.