US Economy and Credit Markets Ended June 2, 2017
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The holiday shortened week recorded higher prices for the stock and bond markets, sending divergent signals to investors. Treasury yields sunk to multi-week lows on Tuesday after the Conference Board reported Consumer Confidence fell in May for the second month in a row. This is a closely watched indicator of current and future optimism because consumer spending is the largest contribution to GDP. Readings have remained above 100, however, indicating that while confidence has waned, it is still positive. The monthly BLS jobs report released on Friday was disappointing and sent bond yields to lows not seen since November. Although the unemployment rate was recorded at 4.3%, the lowest in 16 years, most accompanying data was weaker than expected. The Labor Force Participation Rate fell in May and the number of jobs the economy added was less than forecast for the nonfarm payrolls, private payrolls, and manufacturing payrolls readings. Average hourly earnings YoY came in lower than expected but the MoM reading gained 0.2% as expected. While a tepid job market and weaker inflation outlook have the potential to cause the FOMC to pause in its tightening plan, the market still expects the Fed will raise rates at the June FOMC meeting. Major economic reports (related consensus forecasts; prior data) for the upcoming week include Monday: April Factory Orders (-0.2%, 0.5%), April Durable Goods Orders (-0.5%, -0.7%); Wednesday: June 2 MBA Mortgage Applications (--, -3.4%); Thursday: Initial Jobless Claims (240k, 248k); Friday: April Wholesale Inventories (-0.3%, -0.3%).
Posted on Monday, June 5, 2017 @ 7:45 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.