Vaccine Hopes Push Today’s Sentiment

More news of positive trial results have raised investors’ hopes that an effective vaccine for COVID-19 may be within reach. Equity markets around the world rallied significantly overnight while domestic markets prepare to open substantially higher. Treasury prices have slipped a bit and the Ten-Year’s yield is up a few basis points to around 0.65%.

Apart from the latest medical news, the Mortgage Bankers Association also reported earlier today that, for the week ending July 10, Mortgage Applications rose 5.1% on the heels of the prior week’s increase of 2.2%. Better-than-expected news for Manufacturing was also reported by the New York Fed. It’s Empire Manufacturing Index rose to 17.2 and that was much higher than the level of 10 that was forecast. June’s Index value was minus 0.2.

More inflation-related news also came our way with a report from the BLS that the Import Price Index rose by 1.4% in June against an estimate of a 1% rise. The year-over-year rate came in at minus 3.8% after May’s minus 6% twelve-month rate. For exports, that Price Index also rose by 1.4% last month when only a rise of 0.8% was expected. Year-over-year, those prices have fallen 4.4%.

So, while most equities rally and bond prices slide a little bit, gold and crude oil are treading water. WTI is up less than a dollar to just under $41 while investors await the latest news from OPEC+. Gold has lost a couple of dollars to around $1,807. Industrial Production and Capacity Utilization will be reported a little later this morning.