US Economy and Credit Markets Ended Jan. 31, 2020

30-Year Treasury yields dipped below 2% last week as coronavirus fears sunk risk assets. Correspondingly, Treasury prices rose as demand for safe assets was elevated. The 30-Year is at levels last seen in October 2019. Wednesday of last week featured a surprisingly quiet meeting of the Federal Reserve. The committee noted that the labor market remains strong and economic activity is increasing at a moderate pace. It highlighted rising household spending, but that business fixed investment spending and exports remain weak. It also noted continued low inflation. The target range for the federal funds rate was therefore left unchanged at 1-1/2 to 1-3/4 percent. Regarding economic news, Monday of last week witnessed single-family home sales declining for December. On Tuesday, durable goods were recorded as rising 2.4% for December. On Thursday, Real GDP data reported a 2.1% annual growth rate in Q4 which was just ahead of consensus estimates. The Price Index rose at a 1.4% annual rate for Q4. Lastly, on Friday, Personal Income was reported rising 0.2% in December. Major economic reports (related consensus forecasts, prior data) for the upcoming week include Monday: January ISM Manufacturing (48.5, 47.2), January final Markit US Manufacturing PMI (51.7, unch.) and December Construction Spending (0.5%, 0.6%); Tuesday: December Final Durable Goods Orders (2.4%, unch.) and December Factory Orders (1.1%, -0.7%); Wednesday: January 31 MBA Mortgage Applications (N/A, 7.2%), January ADP Employment Change (160K, 202K) and December Trade Balance (-$47.8B, -$43.1B); Thursday: February 1 Initial Jobless Claims (215K, 216K); Friday: January Change in Nonfarm Payrolls (160K, 145K), January Unemployment Rate (3.5%, unch.) and December final Wholesale Inventories (N/A,-0.1%).
Posted on Monday, February 3, 2020 @ 8:38 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.