US Economy and Credit Markets Ended Sept. 13, 2019

U.S. government bond yields surged last week, reversing a recent slide, on strong economic data and easing trade tensions between the U.S. and China. Retail sales grew a strong 0.4% in August over the prior month, beating expectations, largely driven by higher spending on vehicles. Over the prior year, retail sales grew by 4.1%. The American consumer has largely been a strong spot in the U.S. economy, and Friday's retail sales data bolstered that view. Additionally, the University of Michigan's Consumer Sentiment Index came in slightly higher than expectations. On the trade front, President Trump delayed tariff increases on $250 billion of imports from China while China said it will exempt purchases of U.S. soybeans, pork, and other agricultural products from punitive tariffs. Meanwhile, the European Central Bank and its outgoing President Mario Draghi launched a major monetary stimulus package last week in response to a longer-than-expected slowdown in the eurozone economy and soft inflation. In other central bank news, the FOMC meets on Tuesday and Wednesday this week and is widely expected to cut interest rates by a quarter-point. Major economic reports (related consensus forecasts, prior data) for the upcoming week include: Monday: September Empire Manufacturing (4.0, 4.8); Tuesday: August Industrial Production MoM (0.2%, -0.2%); Wednesday: September 18 FOMC Rate Decision – Upper Bound (2.00%, 2.25%), September 13 MBA Mortgage Applications (N/A, 2.0%), August Housing Starts (1,247k, 1,191k); Thursday: September 14 Initial Jobless Claims (212k, 204k), August Existing Home Sales (5.37m, 5.42m), August Leading Index (0.1%, 0.5%).

Posted on Monday, September 16, 2019 @ 8:30 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.