Today’s Trading Activity – Treasury Yields Fall as Stocks Drop with Crude Oil
Jun 20, 2017
U.S. equities finished near their daily lows as crude prices dropped 2% and officially entered a bear market. Tuesday’s losses left crude down more than 20% from the 2017 peak reached on February 23. The S&P fell 0.7% with shares of energy companies finishing near the bottom. The Dow dropped a more modest 0.3% while the Nasdaq led losses with a 0.8% pullback. Equities’ losses evolved despite comments from House Speaker Ryan aimed at reinvigorating hopes of tax reform. Ryan told CNBC, “We are going to cut taxes. But if we are going to truly fix our tax code, we have to fix all of it, …We are going to get this done in 2017.” The Treasury curve flattened on lower yields with the 2-year yield down 1.2 bps to 1.34% and the 10-year yield 3.1 bps lower at 2.16%. The move was consistent with lower oil prices and reinforced by additional comments about inflation weakness from Chicago Fed President Evans. Despite the lower yields, the Dollar finished higher as the British pound remained weaker and the Euro softened.