US Economy and Credit Markets Ended Dec. 2, 2016

Thursday of last week marked a 17 month high for 10 year Treasury yields before they slumped on Friday amid a mixed jobs report. The December 14th Federal Reserve meeting is expected to result in the Fed raising the benchmark Federal Funds rate and since the election bonds have been under substantial pressure resulting from increased expectations of a higher interest rate environment. Brent oil rose sharply last week as OPEC reached an accord to cut oil production among member countries. The deal represents the group's first supply cut in 8 years as they agreed to cut production by 1.2 million barrels a day in aggregate. Last Tuesday the Real GDP for Q3 was revised up to a 3.2% annualized growth rate primarily from strong personal consumption from US consumers. Wednesday's personal income report registered a .6% increase for October which was ahead of expectations led by private-sector wage growth. On Thursday the ISM Manufacturing Index rose to 53.2 for November which is indicative of continued expansion within the sector. Lastly, on Friday, the jobs report registered an increase in nonfarm payrolls for November but wages unexpectedly slipped .1%. Major economic reports (and related consensus forecasts) for the upcoming week include: Tuesday: October US Trade Balance (-$41.7B, -$5.3B), October Factory Orders (2.5%, +2.2%) and October Durable Goods Orders (4.8%, unch.); Wednesday: Prior week MBA Mortgage Applications; Thursday: Prior week Initial Jobless Claims (255,000, -13,000); Friday: October Wholesale Inventories (-.4%, unch.) and December's preliminary University of Michigan Sentiment reading (94.2, +.4).
Posted on Monday, December 5, 2016 @ 7:47 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.