Before the Bell: The U.S. Labor Department was expected to release figures on the producer Price Index for March, but that issuance was delayed by an outage on the government's news site. Even so, Treasury note yields, down in recent days have ticked up from 1.63% to 12.67% on the 10-year note. So far this morning, the stock market has a mixed look to it, with the Dow futures higher, but the NASDAQ lower.
Elsewhere, the economic calendar will be light today following somewhat disappointing news on the layoff front, as weekly jobless claims issued yesterday, rose modestly in the most recent seven-day stretch. Looking ahead, the upcoming week will feature news on consumer prices next Tuesday. The Federal Reserve's Beige Book summation of the business outlook will follow on Wednesday, with surveys on retail sales, industrial production, business inventories, and unemployment filings on Thursday. Data on housing starts will be out next Friday.
All the while, the market figures to be watching the latest negotiations on President Biden's massive $2.3 trillion infrastructure package, the future of which is still up in the air. Meanwhile, investors received some good news yesterday from Federal Reserve Chair Jerome Powell, who intoned that the lead bank had the tools to curb higher inflation. He expects such increases to be temporary. His comment sled to another rally in the Treasury market and to a corresponding decline in yields, which, as noted, has reversed so far this morning.
That good news helped to lift an overbought stock market still further yesterday, with the recently pressured tech group leading the way higher on strength in shares of Amazon (AMZN) and Tesla (TSLA). Overall, the NASDAQ again did quite well, as the memory of the late-March technology pullback drifted further into the rearview mirror. As for the S&P 500, it rose 17 points higher. But it was the NASDAQ, which soared 141 points, which led the way higher in the Thursday session.
What propelled stocks higher was the further dip in Treasury note yields. In all, the yield on the 10-year Treasury note, which had climbed to 1.76% a couple of weeks ago, dipped back to a less forbidding 1.63%. Moreover, the market also was emboldened by a drop in energy prices and by positive earnings from giant retailer Costco wholesale (COST). That stock responded favorably to the news. – Harvey S. Katz, CFA