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Bob Carey
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  US Economy and Credit Markets Ended Oct. 30, 2020
Posted Under: Weekly Market Commentary
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Long-term U.S. Treasury bond yields rose throughout last week as markets had a risk-off tone with Election Day looming, stimulus talks stalling, and COVID cases rising. The steepening in the yield curve is perceived to be investors positioning themselves for a "blue wave" coming after next week's Election Day. The month of October ended with a record-setting amount of state and local government bond sales as municipalities try to take advantage of low rates ahead of what could be a contentious election. Public officials sold over $71 billion of debt last month, which was 22% higher than the previous high in December of 2017, according to Bloomberg. Last week also produced slew of encouraging economic data. On Tuesday, new orders for durable goods in September were well above expectations. On Thursday, the first estimate for third quarter GDP was reported at 33.1% annual rate, 1.1% higher than the consensus estimate. This was largely due to strong consumer spending growing at a staggering 40.7% annual rate. The week ended with positive personal income data for the month of September. Personal income increased 0.9%, well above expectations, led by strong private sector wages as government aid waned. Major economic reports (related consensus forecasts, prior data) for the upcoming week include Monday: October Final Markit US Manufacturing PMI (53.3, 53.3), October ISM Manufacturing (55.8, 55.4), October ISM Prices Paid (60.5, 62.8), September Construction Spending MoM (0.9%, 1.4%); Tuesday: September Factory Orders (1.0%, 0.7%), September Final Durable Goods Order (1.9%, 1.9%), September Final Durables Ex Transportation ( 0.8%, 0.8%); Wednesday: October 30 MBA Mortgage Applications (n/a, 1.7%), October ADP Employment Change (700k, 479k), September Trade Balance (-$63.9b, -$67.1b), October Final Markit US Services PMI (56.0, 56.0), October Final Markit US Composite PMI (n/a, 55.5), October ISM Services Index (57.4, 57.8); Thursday: October 31 Initial Jobless Claims (740k, 751k), October Continuing Claims (7200k, 7756k), November 5 FOMC Rate Decision (Upper Bound) (0.25%, 0.25%); Friday: October Change in Nonfarm Payrolls (600k, 661k), October Unemployment Rate (7.7%, 7.9%), September Final Wholesales Inventories MoM (-0.1%, -0.1%).
Posted on Monday, November 2, 2020 @ 8:02 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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