US Economy and Credit Markets Ended Oct. 4, 2019

Yields dropped last week for short-term and long-term U.S. Treasury notes as investors digested mixed economic data throughout the week. On Tuesday, the ISM Manufacturing Index for September came in at 47.8, below the consensus expectation of 50.0. A reading below 50 signals a contraction, while above 50 signals an expansion. The ISM Manufacturing Index, which is a survey, fell to a decade low as negative trade-related sentiment continues to stoke fears of a looming recession. Later in the week, the ISM Non-Manufacturing Index for September was reported at 52.6. The reading slightly missed the consensus expectation, but still signaled an expansion, and the major measures for non-manufacturing activity all came in above 50.0. To wrap up the week, Friday's jobs report indicated nonfarm payrolls rose 136,000 last month. Nonfarm payrolls came in roughly 9,000 less than expected, though revisions for July/August pushed nonfarm payrolls up to 181,000. Unemployment dropped to 3.5% in September, the lowest reading in 50 years. Despite the weak manufacturing survey, the September jobs report along with the non-manufacturing survey continues to signal towards a resilient domestic economy. Major economic reports (related consensus forecasts, prior data) for the upcoming week include: Monday: September Monthly Budget Statement ($89.0b, $119.1b); Tuesday: September PPI Final Demand MoM (0.1%, 0.1%), September PPI Final Demand YoY (1.8%, 1.8%); Wednesday: October 4 MBA Mortgage Applications (n/a, 8.1%), August Final Wholesale Inventories MoM (0.4%, 0.4%); CPI MoM (0.1%, 0.1%), CPI YoY (1.8%, 1.7%), October 5 Initial Jobless Claims (281k, 219k), September 28 Continuing Claims (1651k, 1651k); Friday: September Import Price Index MoM (-0.1%, -0.5%), October Preliminary University of Michigan Sentiment (92.0, 93.2).   
Posted on Monday, October 7, 2019 @ 8:12 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.