May 5, 2020 - Market Update

Another day of heavy origination supply and lack of investor demand after the Fed purchases pushed them wider.  Dealers were reporting a range of ~$7.5-$9.0B in origination supply for the day.  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 finished mixed on the day.  At the close, the 2-year was +0.75/32nds (.186) and the 10-year was -6/32nds (.637).  

Stocks were able to finish the day slightly higher after languishing in negative territory for most of the trading session.  Concerns regarding U.S.-China relations started the move lower along with some disappointing economic data.  Factory orders declined -10.3% vs 0.0% from the month prior.  Investors were also evaluating comments from Warren Buffet on the market.  The news that he sold his entire stake in four airlines sent those stocks lower.  The DJIA closed +26.07 to 23,79.76, while the S&P 500 was +12.03 to 2,842.74.  The price of oil is higher with supply dropping and the hope demand will accelerate as businesses start to reopen. 

Market Levels (May):