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OPINION

How Declining Yields Are Affecting The Market

The opinions expressed by columnists are their own and do not necessarily represent the views of Townhall.com.
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AP Photo/Richard Drew

Investors are back out in force today after upbeat economic news and earnings.  The Nasdaq is the best performing, up 1.20%, followed by the S&P 500, up 1%, and trading near another record high. The Dow is gaining .83% and hit an all-time high.

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Energy and Financials, two of the best performers yesterday, are the worst performers today.  Financials are down despite great earnings from Bank of America (BAC) and Citigroup (C), due in large part to the decline in the yields of U.S. Treasuries. The 10 year is current 1.62%.  The reduction in interest rates is helping propel mega/large cap stocks higher.

FAANG, which was hit yesterday, is regaining its momentum. Coinbase (COIN) is relatively flat today, and has been in and out of the green, after its huge debut yesterday and is trading around $332.00.  Cathie Wood’s ARK investment disclosed it bought about $250 million in COIN yesterday.   

S&P 500 Index

+0.93%

 

Communication Services XLC

+1.04%

 

Consumer Discretionary XLY

+0.36%

 

Consumer Staples XLP

+0.76%

 

Energy XLE

 

-0.99%

Financials XLF

 

-0.14%

Health Care XLV

+1.80%

 

Industrials XLI

+0.34%

 

Materials XLB

+1.12%

 

Real Estate XLRE

+1.48%

 

Technology XLK

+1.42%

 

Utilities XLU

+0.56%

 
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Breadth is positive on the NYSE, but down volume outpaces up volume on both exchanges.

Market Breadth

NYSE

NASDAQ

Advancing

1,921

1,908

Declining

1,311

2,105

52 Week High

249

166

52 Week Low

15

36

Up Volume

879.00M

1.08B

Down Volume

984.87M

1.12B

On the economic front, Industrial Production increased 1.4% in March, coming in below consensus +2.8%, and after a 2.6% decline in February. For the first quarter, Industrial Production increased 2.5% on an annualized basis.

To see the chart, click here.

Manufacturing production and mining output increased 2.7% and 5.7%, respectively.  Conversely, utilities declined 11.4%, as temperatures went from unseasonably cold in February to unseasonably warm in March, reducing the demand for heating.

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