DC Lite #228

Welcome back to DC Lite: Daily Chartbook’s free, entry-level newsletter containing 5 of the day’s best charts & insights. Upgrade to get all 30 charts.

Personal update: Thanks to everyone who wrote in last week. I’m happy to report that both mom and baby are doing great! We are absolutely overjoyed with our little nugget!

And now, back to our regularly scheduled programming.

1. Jobless claims. While initial jobless claims dropped by 15k to 227k (vs. 242 est), continuing claims rose by more than expected to the highest level in nearly 3 years.

2. Term premium. "The rise in term premium is the result of higher real interest rates and stronger economic data. Thus, there is no fundamental reason for the Fed to cut again on Nov. 7. If this is indeed the case, the front end of the Treasury curve needs to significantly reprice."

3. Bond selloff. "Forget about the election. The bond selloff over the past month can mostly be explained by the better-than-expected economic news and the change of Fed expectations."

4. Yields vs. stocks. "Historically, it’s taken the 10-year Treasury yield posting a two-standard deviation move before stocks started to care. That’s a change of roughly 60 basis points in the yield within a month. Over the past 4 weeks, the yield has moved some 50 basis points."

5. Retail investor sentiment. Bulls outnumbered bears for the 26th straight week but the spread narrowed as the former dropped to a 6-month low.