US Economy and Credit Markets Ended Nov. 11, 2016
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Trump won: Bonds fell. Bond market pricing moves suggest that the market believes the Trump agenda will result in higher interest rates. Trump's expressed view of focusing on fiscal expansion to fund US infrastructure projects and his statements regarding the continued use of low interest rate policies driving asset bubbles support the pricing moves. The dollar strengthened as a result of Trump being nominated the president elect over concerns that he will employ policies which result in capital outflows from developing markets. Gold and oil fell last week but oil's drop was a result of actual market forces as OPEC members are increasing production even as they say they want to achieve a deal to cut output. Last Monday, the Personal Income data showed an increase in September as well as increased consumption but came in under expectations. Tuesday showed the ISM Manufacturing Index results which came in at 51.9 for October which signals expansion and exceeded expectations. Thursday's Jobless Claim numbers were less than expected as the labor market continues to expand. Lastly, on Friday, the University of Michigan Consumer Sentiment survey rose to a five-month high in October on a preliminary basis. Major economic reports (and related consensus forecasts) for the upcoming week include: Tuesday: November Empire Manufacturing (-2%, +4.8) and October MoM Retail Sales (.6%, unch); Wednesday: November 11th MBA Mortgage Applications, October MoM Final Demand PPI (.3%, unch) and October MoM Industrial Production (.2%, +.1%); Thursday: November 12th Initial Jobless Claims (256k, +2K), October Housing Starts and October MoM CPI (.4%, +.1%); Friday: October Leading Index (.1%, -.1%).

Posted on Monday, November 14, 2016 @ 7:56 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.