Tech giants soar with Q2 GDP -32.9%
July 31, 2020
–On a day when Q2 GDP showed a historic plunge of 32.9%, and Trump suggested the election be postponed, tech giants FB, AMZN, AAPL released better than expected earnings and soared in after hours trading. At the same time, yields are making new lows with the two-yr just under 12 bps, and fives 22.6. Tens ended at 53.8 with TYU 140-005s, the highest ever settle of a front TY contract. It’s a bit higher this morning at 140-03 even with NQU up over 100. Red, green and blue euro$ contracts settled at highest levels ever, with EDU21 and EDH22 at peak levels of 9985 or 15 bps. The ten year inflation-indexed note made a new low of negative 98.3 bps, so of course Dec gold made a new high this morning at 2005, and is currently 1993.8, up $27. The dollar index is making new lows. The only thing that makes sense is that Russell futures are down slightly. Otherwise it’s all a bit Ozzy.
–Over the month of July SOFR has been 9 to 13 bps, with the two year note yield currently right there.
–Today’s news includes Personal Income and Spending, with Core PCE prices expected 1.0% yoy. Also, final July one-yr and 5-10 year inflation expectations from UofM, which were 3.1 and 2.7 at the mid-month release.
