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Bob Carey
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  US Economy and Credit Markets Ended Feb. 19, 2021
Posted Under: Weekly Market Commentary
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Yields continued to rise as bond prices are falling amid rising expectations for increased inflationary pressure. The curve steepened with longer-dated bonds commanding ever higher yields as investors are favoring short-dated bonds for defensive investments as a result of inflation concerns. Last Wednesday saw three major reports. Industrial Production eased out expectations showing a 0.9% increase for January versus an expected reading of 0.4%. Retail sales popped 5.3% in January which was well ahead of a consensus expected gain of 1.1% - the gain was largely attributed to easing lockdowns and the end of year stimulus package. The January Producer Price Index was seen increasing 1.3% also ahead of expectations. Energy was up over 5%, driving the gain, and excluding energy prices rose 1.2%, still well above expectations. This represents the first and only time the PPI rose >1% in a month since the Index series began in 2009.  Housing reports last week included a weak Thursday report of January housing starts falling 6% for the month but with offsetting news of a 0.6% increase to existing January home sales. Major economic reports (related consensus forecasts, prior data) for the upcoming week include Monday: January Leading Index (0.3%, 0.3%); Tuesday: February Conf. Board Consumer Confidence (90.0, 89.3); Wednesday: February 19 MBA Mortgage Applications (N/A, -5.1%), January New Home Sales (850K, 842K); Thursday: January preliminary Durable Goods Orders (1.1%, 0.5%), February 20 Initial Jobless Claims (835K, 861K) and Q4 GDP Annualized QoQ (4.1%, 4.0%); Friday: January preliminary Wholesale Inventories MoM (0.3%, 0.3%), January Personal Income (9.5%, 0.6%), January Personal Spending (2.4%, -0.2%), February MNI Chicago PMI (61.0, 63.8) and February Final University of Michigan Sentiment (76.4, 76.2).
Posted on Monday, February 22, 2021 @ 8:18 AM • Post Link Share: 
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