US Economy and Credit Markets Ended June 10, 2016

Bob Carey
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US Economy and Credit Markets Ended June 10, 2016

Posted Under: Weekly Market Commentary

US government bond yields remain at historic lows as the United States has a relative yield which is greater than many of its European counterparts and economic conditions that are stable but leave many investors anxious about the state of global, and domestic, growth. The ECB extended its debt purchase program last week to include the purchase of corporate bonds. It is purchasing 80 billion Euros a month in bonds. Last week's Tuesday Nonfarm Productivity report showed an annualized decline of .6% for the first quarter of 2016. This was revised up from the previous month's estimate for a decline of 1%. Compensation per hour was up 4.2% at an annual rate, versus 2.6% in the prior year, and productivity was up at a 1.3% annualized rate in the first quarter. On Thursday, the June 4th Labor Department data on jobless claims reported an unexpected decrease in first time jobless claims and also reported continuing claims falling to 2.1 million. While the rate at which employers add workers fell for April, jobless claims are still very low as employers have been holding onto their existing workers. Next week will be a busy week of economic reports and includes the June Federal Reserve meeting with the expectation of no change to the current interest rates. Major economic reports (and related consensus forecasts) for the upcoming week include: Tuesday: May Retail Sales (.3%, -1%); Wednesday: June 10th MBA Mortgage Applications, May Final PPI demand (.3%, +.1%), June Empire Manufacturing report (-4.95), May Industrial Production (-.2%, -.9%) and the FOMC Rate Decision (.25%-.5%, unch.); Thursday: June 11th Initial Jobless Claims (270k, +6K) and May CPI (.3%, -.1%); Friday: May housing starts (1150K, -22K).

Posted on Monday, June 13, 2016 @ 8:23 AM • Post Link	Share:
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These posts were prepared by First Trust Advisors L.P., and reflect the current opinion of the authors. They are based upon sources and data believed to be accurate and reliable. Opinions and forward looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security.

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