Last week saw stock prices and bond yields fall as markets got back in touch with their recent habit of trading primarily on the coronavirus outlook.  It's not that this habit was ever really broken.  It just was on hold as we waited to see what the impact would be of quarantines being gradually lifted.  By the afternoon, the Fed reminded us that it's not just the case count that matters, but also the official policy response, as it unveiled its hotly-anticipated corporate bond buying plans (to begin today).  Overnight news added emphasis to the point with talk of another $1 trillion in a new fiscal stimulus package.

We'll hear more from Powell today as he delivers semi-annual congressional testimony (via webcast) at 10am. But before that, we'll have a chance to see if the Retail Sales data bounced back as much as analysts expect for the month of May.  Forecast consensus pegs the number at +8.0% versus a previous reading of -16.4.

In terms of market-watching, things are getting interesting for bonds and not in a great way as far as Treasuries are concerned.  As last week's rally brought yields back into the previous range, we've seen resistance at levels that suggest a gradual uptrend remains intact.  From here, we can keep an eye on several key pivot points overhead.  The .74% level we had been following should now be amended.  .723 has seen more bounces so far this week.  That's the level to beat if we rally.  Overhead ceilings are .77 and .835 with a somewhat supportive case to be made for .805

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Expect bond market fates to remain tied to stocks.  There's been a ton of correlation recently and the "stock lever" will continue to be one of the most relevant considerations for bond market momentum.

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