US Economy and Credit Markets Ended June 8, 2020

Bob Carey
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US Economy and Credit Markets Ended June 8, 2020

Posted Under: Weekly Market Commentary

The yield curve steepened last week as long-dated U.S. Treasury Bond yields pushed higher throughout the week. Investors digested a weekend of protests but had little impact on financial markets as investors focused on the reopening of the U.S. economy. With green shoots emerging, investors favored risky assets throughout the week, pushing U.S. Treasury Bond prices down and yields up. May ISM Manufacturing and ISM Non-Manufacturing Indexes both signaled contraction for the month of May. More importantly, the ISM data displayed improvement from April levels. Long-dated U.S. Treasury Bond yields surged higher on Friday as the 10-Year Treasury Bond yield reached its highest level since March. The trend towards risky assets continued as a much stronger-than-expected May jobs report on Friday fueled investor optimism for an economic recovery. Nonfarm payrolls rose about 2.5 million for the month of May, well higher than the consensus expectation of a decline of 7.5 million. The unemployment rate of 13.3% in May signaled a 1.4% decrease from April. Major economic reports (related consensus forecasts, prior data) for the upcoming week include: Tuesday: May NFIB Small Business (92.0, 90.9), April Final Wholesale Inventories MoM (n/a, -3.9%); Wednesday: June 5 MBA Mortgage Applications (n/a, -3.9%), May CPI MoM (0.0%, -0.8%), May CPI YoY (0.2%, 0.3%), June 10 FOMC Rate Decision (Upper Bound) (0.25%, 0.25%), May Monthly Budget Statement (-$590.0b, -$737.9b); Thursday: May PPI Final Demand MoM (0.1%, -1.3%), May PPI Final Demand YoY (-1.3%, -1.2%), June 6 Initial Jobless Claims (1575k, 1877k), May 30 Continuing Claims (20800k, 21487k), June 7 Bloomberg Consumer Comfort (n/a, 37.0); Friday: May Import Price Index MoM (0.6%, -2.6%), June Preliminary U. of Michigan Sentiment (75.0, 72.3).

Posted on Monday, June 8, 2020 @ 8:16 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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