Thursday, June 10, 2021

Daily Market Report 6/10/21  We received the long-awaited inflation report for this week today, which is the Consumer Priced Index (CPI), for the month of May.  The CPI rose 0.6% in May; and it's YoY rose from 4.2% in April to 5.0% in May.  The Core CPI (excluding food and energy) rose 0.7% in May; and it's YoY rose from 3.0% in April to 3.8% May.  Lastly, the Initial Jobless Claims came in at 376k new claims last week.  Last week's report was revised higher, from 385k to 405k.  We're still seeing improvement here, as the amount of people applying for Unemployment is shrinking, along with Continued Claims.  Stocks are Up today, despite the high inflation data.  Last month, the Markets tanked on the news; however, now, Investors are getting more inline with the Fed that the data is transitory.  I am seeing comments by many investors that they may have a little different definition of transitory, so they're not completely in agreement with the Fed.  Many are stating that we may be at the top end of Inflation, but they disagree with the pace of inflation trending downward.  Many Investors feel it might take years for it to happen; whereas, many believe the Fed has the notion is will be much quicker.  Also, Christine Lagarde, President of ECB, stated much the same as our Fed has been saying.  This helped the Markets a bit.  GameStop reported that the SEC is probing them in regards to the trades in the Market; and mentioned they're not the only ones being probed.  MBS initially dropped after the release of the CPI report.  Lenders initially came out with worse pricing too.  However, the Markets subsided and shrugged off the inflation news and have rebounded.  MBS is currently Up 2bps and testing it's 100 DMA again, so Lenders are repricing already this morning to an improvement.  Pricing should be about the same as yesterday's close.  Yields initially worsened too after the inflation news (touching around 1.54%), but have slipped below it's 100 DMA and now testing a Technical floor; it's sitting at 1.47%.

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