US Economy and Credit Markets Ended April 18, 2019

Despite the Mueller report leading news last Thursday, it was a fairly benign week for Treasuries. The variable rate municipal-bond market leapt last week, however; likely from retail investors using the bonds as funding for paying their tax bills. Unlike their fixed-rate counterparts variable-rate municipal bonds are generally resold for face value. Thursday's retail sales data surprised to the upside and twelve of thirteen major categories registered an increase and the strength of the data resulted in weakness in Thursday's bond markets. Also last week, Tuesday's March Industrial Production was weaker than expected as auto production continues to be slow. Over the past year auto production has fallen 4.5% amid increasing loan costs and high supply. February's trade deficit from goods and services was less than expected but still $49.4 billion and markets seem to be currently optimistic that a Chinese and United States trade deal can be worked out between the two superpowers. OPEC output cuts and US sanctions on Venezuela and Iran continue to buoy oil prices which are testing the $65/bbl level. Major economic reports (related consensus forecasts, prior data) for the upcoming week include: Monday: March Existing Home Sales (5.30M, 5.51M); Tuesday: March New Home Sales (646K, 667K); Wednesday: April 19 MBA Mortgage Applications (N/A, -3.5%); Thursday: March preliminary Durable Goods Orders (0.7%, -1.6%) and April 20 Initial Jobless Claims (N/A, 192K); Friday: Q-o-Q 1Q GDP Annualized (2.0%, 2.2%) and April final University of Michigan Sentiment (97.0, 96.9).
Posted on Monday, April 22, 2019 @ 8:26 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.