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US Economy and Credit Markets Ended March 1, 2019
Long-dated U.S. Treasury yields declined early in the week as investors favored government paper amid weak housing data and Federal Reserve Chairman Jerome Powell's testimony to Congress. Housing starts declined 11.2% in December and are down 10.9% versus a year ago, the slowest pace of activity in two years. Fed Chairman Jerome Powell reiterated the Federal Open Market Committee's patient stance on future interest rate changes. Treasury yields ticked back up on Thursday after fourth quarter GDP data came in higher than expected. Real GDP grew at a 2.6% annual rate in the fourth quarter of 2018, beating the consensus expected 2.2%. Real GDP was up 3.1% in the fourth quarter compared to a year ago, the fastest growth rate since 2005. Investors digested weaker-than-expected manufacturing data released on Friday. The ISM Manufacturing Index fell to 54.2 in February, below the consensus expected 55.8. The Manufacturing Sector still grew in February, albeit at a slower pace, with continued tariff uncertainty and inclement weather reportedly dulling growth. The details in the report indicated a better story as all but two of the eighteen industries reported growth in the month of February. Major economic reports (related consensus forecasts, prior data) for the upcoming week include: Monday: December Construction Spending MoM (0.2%, 0.8%); Tuesday: February ISM Non-Manufacturing Index (57.3, 56.7), December New Home Sales (589k, 657k); Wednesday: March 1 MBA Mortgage Applications (N/A, 5.3%), February ADP Employment Change (190k, 213k), December Trade Balance (-$57.3b, -$49.3b); Thursday: March 2 Initial Jobless Claims (225k, 225k), February 23 Continuing Claims (1762k, 1805k); Friday: January Building Permits (1280k, 1326k), January Housing Starts (1190k, 1078k), February Change in Nonfarm Payrolls (185k, 304k), February Unemployment Rate (3.9%, 4.0%).
Monday, March 4, 2019 @ 8:05 AM
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