Fear Factor Fall-Out

The declaration of a coronavirus state of emergency by the State of California has surely contributed to an elevation of investor angst as a refreshed risk-off attitude drives bond prices up and equity values down. Ten-Year Treasuries are up more than a full point in price for a yield of around 93 basis points. Two-Year yields have fallen to not much over 1/2 per cent and the Long Bond’s yield is around 1.60%. That issue has appreciated almost 3 points in price. On the plus side, Challenger, Grey, and Christmas reported that Job Cuts fell by 26% in February on a year-over-year basis, but Non-Farm Productivity for Q4 slipped to 1.2% growth from the prior quarter’s 1.4%. Unit Labor Costs only rose by 0.9% last quarter against an expected rise of 1.4%. Not good news for those hoping for rising inflationary expectations.