US Economy and Credit Markets Ended August 17, 2018

The yield curve flattened slightly last week but Treasury yields were overall little changed as investors monitored a currency crisis in Turkey and weighed new economic data. On Monday, the yield on the U.S. 10-year Treasury rose after three straight days of declines in a bet that the crisis in Turkey would be contained. Selling continued on Thursday and Friday on news that the U.S. and China would work towards resolving the trade dispute between the two countries. In economic data, retail sales grew 0.5% in July over the prior month, easily topping expectations of 0.1%. The growth in retail sales was particularly strong at clothing stores and bars & restaurants. Housing starts grew 0.9% in July over the prior month but were significantly below the expected rebound from a 12.9% month-over-month decline in June. The 1.168 million seasonally-adjusted annual rate of housing starts in July is 1.4% below the July 2017 rate. Meanwhile, the University of Michigan announced Friday that its consumer sentiment index fell to its lowest level since September 2017, which was below expectations. The decline reflected less favorable views on pricing for big-ticket purchases. This week, the minutes of the last Federal Open Market Committee meeting will be released on Wednesday ahead of the Kansas City Fed's annual economic symposium in Jackson Hole, Wyoming. Federal Reserve Chairman Jerome Powell is scheduled to deliver a speech at the symposium on Friday. Major economic reports (related consensus forecasts, prior data) for the upcoming week include: Wednesday: August 17 MBA Mortgage Applications (N/A, -2.0%), July Existing Home Sales (5.41m, 5.38m); Thursday: August 18 Initial Jobless Claims (215k, 212k), July New Home Sales (648k, 631k), August Preliminary Markit US Manufacturing PMI (55.0, 55.3); Friday: July Preliminary Durable Goods Orders (-0.7%, 0.8%).
Posted on Monday, August 20, 2018 @ 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.