May 7, 2020 - Market Update

 The Fed purchase schedule today includes a maximum of $1.8B FN15 year and then later a maximum of $3.960B FN30 year securities. 

Treasuries were mixed with the yield on the 10-year rising following the treasury refunding announcement of a record $96bln.  At the close, the 2-year was +0.625/32nds (.180) and the 10-year was -13.5/32nds (.705).  

Stocks fell on Wednesday as investors digested disappointing economic data and mixed earnings reports.  The ADP Employment report showed that 20.236M jobs were cut in April.  The DJIA closed -218.45 to 23,664.64, while the S&P 500 was -20.02 to 2,848.42. 

While residential remodeling, which is as big as new single-family construction, has generally grown by about 5% a year since the Great Recession of 2008/09, things are changing. The combination of job losses, fear of job losses, declining household income, limited house price appreciation, falling equity prices, social distancing and importantly, fewer existing home sales, will discourage home improvement, causing it to shrink by about 5%/year.

Market Levels (May):