US Economy and Credit Markets Ended May 29, 2020

Bob Carey
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US Economy and Credit Markets Ended May 29, 2020

Posted Under: Weekly Market Commentary

Treasury yields were mostly flat during the week on a mix of optimistic and pessimistic reports both domestically and around the world. On Tuesday, yields rose as more lock-downs were lifted around the U.S., Japan withdrew its state of emergency for Tokyo and France and Spain announced gradual reopening plans. Yields remained flat on Wednesday as the New York Fed President said the central bank was considering policies that would attempt to keep borrowing costs at fixed levels. Also, on Wednesday, U.S. Secretary of State Mike Pompeo said that Hong Kong "was no longer autonomous from China." On Thursday, China passed a National Security Law that is jeopardizing Hong Kong's autonomy. These increased tensions between the U.S. and China may lead to Hong Kong losing their special trading status with the U.S. Thursday's news on China overshadowed several economic reports that were not as bad as expected. Initial Jobless Claims were 2.12M, however, Continuing Claims were only 21.1M compared to estimates of 25.7M. Yields dropped on Friday as President Trump announced that the administration was looking to eliminate policies that give Hong Kong preferential treatment but did not institute sanctions and will not yet withdraw the Phase One trade deal. Major economic reports (related consensus forecasts, prior data) for the upcoming week include: Monday: May Final Markit US Manufacturing PMI (40.4, 39.8), April Construction Spending MoM (-0.6%, 0.9%), May ISM Manufacturing (43.5, 41.5); Wednesday: May 29 MBA Mortgage Applications (n/a, 2.7%), May ADP Employment Change (-9000k, -20236k), April Factory Orders (-14.0%, -10.3%), April Final Durable Goods Orders (n/a, -17.2%); Thursday: May 30 Initial Jobless Claims (1800k, 2123k); Friday: May Change in Nonfarm Payrolls (-7650k, -20537k), May Unemployment Rate (19.5%, 14.7%).

Posted on Monday, June 1, 2020 @ 8:35 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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