Markets under heavy pressure as inflation worries increase

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Published Date 11/6/2024

Early today the DJIA +1300, the 10 year note yield 4.46% +17 bps, the 2 year note +8 bps.

Inflation fears running rampant this morning. Investors are optimistic that a second Trump administration will favor business with tax cuts, deregulation, and tariffs, expected to boost economic growth, corporate profits, and inflation. Inflation fears driven by his tariff comments. The equity markets love it, the bond market is rebelling, they are two different markets each seeing it differently. Now what will the Fed do?

Inflation fears have been dominant prior to the election, now the concern is expanding; puts the Fed in a tight spot. The Fed may have to turn more hawkish to confront inflation if in fact it does increase as is presently expected. Trump’s return to the White House could refocus the Federal Reserve on fighting inflation. The FOMC meeting just getting underway, the members have a lot to think about; tomorrow Powell’s press conference, always critical, will be even more interesting.

At 9:30 am the DJIA opened +1344, NASDAQ +320, S&P +109. 10 year 4.48% +19 bp. FNMA 6.0 30 year coupon at 9:30 am -34 bp from yesterday’s close and -19 bp from 9:30 am yesterday.

At 9:45 am the October PMI composite index at 54.1 from 54.0, services sector 55.0 from 55.2.

At 1 pm $25B 30 year bond auction.

Gold is being crushed today on the idea inflation will increase. Crude oil also declining.

Source: TBWS

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