Morning Report: Commodities continue to rise

Vital Statistics:

S&P futures4,39014.2
Oil (WTI)114.132.63
10 year government bond yield 1.87%
30 year fixed rate mortgage 4.09%

Stocks are flattish this morning as commodities rise and the war in Ukraine enters its second week. Bonds and MBS are down.

Jerome Powell’s testimony yesterday caused market participants to pare back their bets on the markets now centered on only a 25 basis point hike in March. At one point yesterday, markets were factoring in a chance of the Fed doing nothing this month. He will have another day of questioning on the Hill today.

Commodity prices continue to climb with oil hitting the highest levels since 2008. It isn’t just oil however – metals like aluminum and zinc are rising as well. The Bloomberg commodity index had the biggest weekly gain since the 1960s.

Initial jobless claims fell to 215k last week, while nonfarm productivity rose 6.6%. This is good news, as productivity is the key to higher living standards. Unit labor costs rose only 0.3%.

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