US Economy and Credit Markets Ended August 11, 2017

Treasury prices rose as geopolitical concerns increased overall demand for safe haven assets. Friday's July Consumer Price Index information came in under expectations as energy prices were low and the weak CPI data further contributed to weakness in longer-dated yields. The geopolitical concerns and weak CPI data combined to flatten the yield curve and, in spite of last week being one of the busiest weeks of earnings reports for major American corporations, the tense words between the US and North Korea disrupted what had been a very calm summer in equity markets. Oil was unable to get above $50/bbl for the first time since May of 2017 and has traded in a range between $40-$56 per bbl since August of 2016. Weakness in oil prices was attributed to compliance among OPEC members falling to 75% in July and persistently high inventory levels. Although the International Energy Agency is estimating inventories falling in the forthcoming fourth quarter, last week they revised their estimated draw to be less than previously expected. Last week's economic news was light in the extreme but major economic reports (related consensus forecasts; prior data) for the upcoming week include: Tuesday: August Empire Manufacturing and July Retail Sales (.4%, +.6%); Wednesday: Prior week MBA Mortgage Applications and July Housing Starts (1,225K, +10K); Thursday: prior week Initial Jobless Claims, July Industrial Production (.3%, +.1% and the July Leading Index (.3%, -.3%); Friday: August preliminary University of Michigan Sentiment (94, +.6).
Posted on Monday, August 14, 2017 @ 8:01 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.