Dow was off 175, decliners over advancers 4-1 & NAZ declined 133. The MLP index added 2+ to 253 & the REIT index dropped 4+ to the 337s. Junk bond funds fluctuated & Treasuries had more selling raising higher yields further (more below). Oil rose 1+ to the 88s (around 1 year highs) & gold shot up 24 to 1960.
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Mortgage demand falls to the lowest level since 1995 as interest rates near 8%
Housing starts rebound in September amid spike in mortgage rates
Treasuries were little changed as investors digested the latest economic data & considered the outlook for Federal Reserve interest rates. The 10-year Treasury yield was down nearly 1 basis point to 4.839%, trading near 16-year highs seen in early Oct & the 2-year Treasury yield was trading more than 1 basis point lower at 5.199% after yesterday hitting levels last seen since 2006. Yields & prices move in opposite directions & 1 basis point equals 0.01%. Retail sales figures for Sep increased by 0.7% for the month. That's far higher than the 0.3% anticipated & indicates resilience from consumers in light of higher interest rates & other economic pressures. The data brought up renewed concerns over the outlook for interest rates, with some investors viewing it as an indication that rates may be hiked further or at least kept elevated for longer. Markets are still pricing in a 90% chance that rates will remain unchanged when the Fed announces its next monetary decision on Nov 1, but the probability of a Dec rate increase rose after yesterday's data, according to the CME Group's FedWatch tool. In recent days & weeks, various Fed officials have indicated that the central bank may be done hiking, especially as higher Treasury yields are contributing to tighter economic conditions. Further comments from policymakers are expected this week, including by Fed Chair Jerome Powell. Investors are looking to their comments for hints about their policy expectations.
10-year Treasury yield steadies near highest level in 16 years
Dow Jones Industrials
