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Yields Lower, Stocks Higher on Hopes of Vaccine

Bond yields continued to grind lower this week as equity prices rose on hopes that a coronavirus vaccine breakthrough will come sooner than previously expected. The week's economic indicators were mixed, as some data reflected the positive reopening trends in the early part of June. As virus infections surged in the latter part of the month, many of the efforts to reopen economies had to be reversed, stifling the nascent recovery.

Thursday's labor market data showed continued weakness, as another 1.3mm Americans filed first-time claims for unemployment insurance last week, while 17.3 million Americans continued receiving benefits. With the federal unemployment stimulus scheduled to end soon and coronavirus infections still rising, the labor market outlook is uncertain at best. The most recent consumer confidence numbers reflect this uncertainty, as Friday's consumer sentiment measure reversed June's rebound and returned to levels near April's trough.

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