Long-term interest rates dipped this week, lifting bond prices. Credit risk also eased slightly, helping the corporate and high-yield sector. Investment-grade and corporate bonds enjoyed the best performance, while floating-rate funds saw a small decline.
The 30-year Treasury bond yield slid below 3 percent on the week before bouncing. The 10-year held above 2.7 percent. Both have remained in short-term downtrends since peaking in February.
Long-term bonds declined this week, but short-term rate expectations held steady. This week’s job report could be very important for the bond market. The ADP employment report showed 241,000 new jobs in March. Economists expect the Bureau of Labor Statistics will report 175,000 new jobs on Friday. They also see the unemployment rate falling from 4.1 to 4.0 percent.
The U.S. Dollar Index has been in consolidation for two-and-a-half months. Despite fears of a trade war, the dollar has moved towards the upper end of its trading range. The level to watch on PowerShares DB U.S. Dollar Index Bullish (UUP) is $23.75.
Within the technology sector, software and networking stocks saw small losses. Social media and semiconductors saw larger declines. Apple (AAPL) announced it was working on its own microprocessors, sending shares on Intel (INTC) down 8 percent on Monday before they rebounded.
iShares U.S. Home Construction (ITB) rallied on Wednesday after Lennar (LEN) beat earnings estimates. Analysts forecast $0.77 per share, but the company delivered $1.11 in earnings. Orders rose 30 percent. Revenue increased 28 percent, and beat analyst estimates by 12 percent.