US Economy and Credit Markets Ended Nov. 22, 2019

Treasury prices were mixed over the course of the week as short-term yields rose and long-term yields fell on mixed news of a phase-one trade deal between the U.S. and China. Early in the week, Treasury prices rose as there was pessimism of a trade deal from government sources in China. CNBC reported that odds of a trade deal were low without rolling back existing tariffs. The Wall Street Journal reported that talks were in danger of hitting an impasse and Reuters reported that a deal is unlikely before the end of the year. China accused the U.S. of meddling in domestic affairs when Congress passed a bill requiring the U.S. Secretary of State to certify Hong Kong was sufficiently independent from Beijing every year. However, Treasury prices dropped later in the week with increased optimism for a trade deal. On Thursday, it was reported that Beijing was pushing to have advance talks for a partial trade deal. The sticking points are reported to be guaranteed agricultural purchases by China from the U.S. and stronger technology language in China law without guaranteed tariff rollback by the U.S. In Europe, several purchasing managers' surveys suggested a slowdown of business activity in the Eurozone and the United Kingdom. Major economic reports (related consensus forecasts, prior data) for the upcoming week include: Tuesday: October Prelim. Wholesale Inventories MoM (n/a, -0.4%), October New Home Sales (708k, 701k), November Conf. Board Consumer Confidence (127.0, 125.9); Wednesday: November 22 MBA Mortgage Applications (n/a, -2.2%), 3Q S GDP Annualized QoQ (1.9%, 1.9%), October Prelim. Durable Goods Orders (-0.7%, -1.2%), November 23 Initial Jobless Claims (220k, 227k), October Personal Income (0.3%, 0.3%), October Personal Spending (0.3%, 0.2%).
Posted on Monday, November 25, 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.