US Economy and Credit Markets Ended September 7, 2018

U.S. Treasury note yields rose early in the week as U.S. investors returned from Labor Day weekend to the ISM Manufacturing Index hitting a 14-year high of 61.3, easily beating the consensus estimate of 57.6. The strong data suggests that despite trade fears, U.S. industry remains strong. U.S. Treasury note yields pulled back on Thursday as investors saw private sector payrolls come in lower than expected with August ADP Employment Change at 163,000. Despite the weaker-than-expected private sector payrolls, initial jobless claims hit a 49-year low of 203,000, while productivity remained unchanged. U.S. Treasury note yields rebounded early Friday as economic data poured in. Nonfarm payrolls rose 201,000 in August, beating the consensus estimate by more than 10,000. Unemployment remained unchanged at 3.9%, but investors were encouraged by average hourly earnings increasing 0.4%. The increase in worker's wages pushed the yearly growth rate to 2.9%, the fastest wage growth since 2009. Gains in U.S. Treasury note yields largely held Friday afternoon as investors digested President Trump threatening more tariffs on goods imported from China. Major economic reports (related consensus forecasts, prior data) for the upcoming week include: Tuesday: July Final Markit Wholesale Inventories MoM (0.7%, 0.7%); Wednesday: September 7 MBA Mortgage Applications (N/A, -0.1%), August PPI Final Demand MoM (0.2%, 0.0%); Thursday: August CPI MoM (0.3%, 0.2%), August CPI YoY (2.8%, 2.9%), September 8 Initial Jobless Claims (210k, 203k); Friday: August Retail Sales Advance MoM (0.5%, 0.5%), August Industrial Production MoM (0.3%, 0.1%), September Preliminary U. of Michigan Sentiment (96.7, 96.2).
Posted on Monday, September 10, 2018 @ 8:53 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.