US Economy and Credit Markets Ended Aug. 19, 2016
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Treasury prices slumped on Friday after John Williams, a Federal Reserve regional chief, noted a rate hike was "in play" for the September meeting. Following his comments yields spiked and the dollar rose; but stocks did not. Also speaking out last week was William Dudley who told the Fox Business Network that it's possible that a rate hike could occur as early as the mid-September policy meeting. Wednesday and Thursday had seen Treasuries, stocks and oil prices all improve amid positive economic data. Oil entered a bull market as investors responded to speculation that OPEC would discuss a potential output freeze. Tuesday saw a bevy of reports and some good economic news. Housing starts rose 2.1% in July representing an increase of 5.6% over the prior year. July industrial production was shown to increase .7% in July which was ahead of consensus estimates. While the CPI was unchanged for July, matching expectations, it is up .8% versus a year prior and the "core" CPI (excludes food and energy) is up 2.2% versus a year ago. Thursday saw the release of the prior week Jobless Claims report which was better than expected. Last week ended with the July US Index of Leading Economic Indicators also coming in better than expected at .4%. Major economic reports (and related consensus forecasts) for the upcoming week include: Tuesday: July New Home Sales (577K, -15K); Wednesday: Aug 19 MBA Mortgage Applications, July Existing Home Sales (5.5M, -.7M); Thursday: Aug 20 Initial Jobless Claims (265K, +3K) and preliminary July Durable Goods Orders (3.5%, +7.4%); Friday: preliminary July Wholesale Inventories, QoQ Annualized GDP (1.1%, -.1%) and the University of Michigan Sentiment survey (90.7, +.3)

Posted on Monday, August 22, 2016 @ 8:03 AM

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.