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Earlier this week, Market Insights highlighted the improving story for the U.S. economy. The trend continued today as initial jobless claims fell more than expected to their lowest level since the end of November.
That triggered an interesting milestone: The 30-year Treasury yield index ($TYX.X) hit 19.51. That was slightly above the March 18 peak, and the highest reading since February 20, 2020 — a few days before the Covid selloff slammed markets. (Divide this index by 10 to get the 30-year yield.)
Other catalysts for today’s optimism include:
Financials stand to benefit the most from the higher rates because it steepens the yield curve. Additionally, banks can profit from re-absorbing reserves set aside for bad loans. Don’t forget non-farm payrolls are due tomorrow morning.
Regional banks had a big surge in late 2023. Now, after a period of consolidation, some traders may expect further gains. The first pattern on today’s chart of the SPDR S&P Regional Banking ETF is the falling trendline along the highs of January and early March....
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The stock market has been optimistic about inflation since late 2023, but price pressures may be returning as the Federal Reserve considers interest-rate cuts. The price of energy, shelter and materials have quietly risen in the last month. The increases follow months...