US Economy and Credit Markets Ended January 4, 2019

Investors welcomed in the New Year with a shortened, albeit event-filled first week. Thursday's weaker-than-expected December ISM Manufacturing Index number raised questions about the strength of the United States economy. US Treasury note yields were down on the news, with the 10-year Treasury note yield and the 30-year Treasury note yield falling to their lowest since January of last year. On Friday, nonfarm payrolls rose 312,000 in December, crushing the consensus expected 184,000. Including revisions to October/November, nonfarm payrolls increased 370,000. The strong jobs data alleviated some concerns of a slowing economy. At the same time in Atlanta, Federal Reserve Chairman Jerome Powell softened his tone by saying policymakers "wouldn't hesitate to make a change" if needed and that the Federal Reserve is listening to the concerns of the market. Treasury yields surged on the news, with the 10-year Treasury note yield recording its biggest single-day gain since November of 2016. Major economic reports (related consensus forecasts, prior data) for the upcoming week include (Factory orders/durables data postponed by government shutdown): Monday: December ISM Non-Manufacturing Index (59.0, 60.7); Tuesday: November Trade Balance (-$54.0b, -$55.5b), November Preliminary Wholesale Inventories MoM (0.5%, 0.8%), November New Home Sales (568k, 544k), November Construction Spending MoM (0.2%, -0.1%), November Factory Orders (0.3%, -2.1%), November Final Durable Goods Orders (n/a, 0.8%); Wednesday: January 4 MBA Mortgage Applications (n/a, -8.5%); Thursday: January 5 Initial Jobless Claims (225k, 231k); Friday: December CPI MoM (-0.1%, 0.0%).
Posted on Monday, January 7, 2019 @ 8:06 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.