Stocks Move Higher As Treasury Yields Pull Back

Retail Sales Report Disappoints

The U.S. has just released Retail Sales report for April. The report indicated that Retail Sales remained unchanged in April compared to analyst consensus which called for growth of 1%.

It should be noted that Retail Sales’ growth in March was revised from 9.8% to 10.7% which explains why analysts may have overestimated the growth in April.

S&P 500 futures are up by about 0.5% in premarket trading as traders stay ready to buy stocks after the recent pullback.

Today, traders will have a chance to take a look at additional economic data. Industrial Production is expected to grow by 1% month-over-month in April while Manufacturing Production is projected to increase by 0.4%.

Traders will also keep an eye on the preliminary Consumer Sentiment Data. Analysts expect that Consumer Sentiment increased from 88.3 in April to 90.4 in May.

Treasury Yields Pull Back As Fed Officials Manage To Calm Markets

The yields of 10-year Treasuries declined from the recent highs at 1.70% to 1.64% as Fed officials managed to calm markets.

The recent inflation reports triggered a spike in yields, but Fed officials spent the last few days telling markets that the Fed would not rush to change its course.

The dovish commentary worked well, and yields began to move lower which was especially bullish for high-growth stocks which remain sensitive to changes in yields.

It remains to be seen whether the current pullback in yields will be sustainable as inflation may move even higher in the upcoming months. However, the current pullback is sufficient enough to lure speculative traders who rush to buy stocks after the recent sell-off.

WTI Oil Moves Back Above The $64 Level

WTI oil managed to get back above the $64 level as traders shrugged off worries about the challenging situation with coronavirus in India and the restart of the Colonial Pipeline.

Instead, the market is focused on the driving season which is expected to be strong due to successful mass vaccination program and pent-up demand for holidays.

The current move is bullish for energy-related stocks which have been under pressure in recent trading sessions but look ready for a rebound today.

For a look at all of today’s economic events, check out our economic calendar.