US Economy and Credit Markets Ended April 3, 2020
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Last week U.S. Treasury bond yields for most longer-dated maturities fell while short-term yields rose as investors continue to navigate the economic impact of the Coronavirus. According to Johns Hopkins University, Coronavirus cases in the United States rose to over 250,000 as testing continues to increase and a million around the world. Government mandated social distancing, the main tool to combat the spread of the pandemic, continues to take a toll on the economy. Initial jobless claims climbed over 6.6 million last week, well above the expected 3.3 million. Nonfarm payrolls plummeted by 701,000 in March, much worse than the expected decline of 100,000. Restaurants and bars accounted for more than half of the initial jobless claims. For perspective, the largest monthly nonfarm payroll drop during the Great Recession was 800,000 in March 2009. The U.S. unemployment rate increased to 4.4% in March, up from 3.5% in February. The Trump Administration's $350 billion small-business relief program kicked off Friday. Known as the Paycheck Protection Program, the program allows small businesses to apply for loans up to $10 million with payments deferred for six months. Participating banks are expected to increase next week. Major economic reports (related consensus forecasts, prior data) for the upcoming week include Wednesday: April 3 Mortgage Applications (N/A, 15.3%); Thursday: March PPI Final Demand MoM (-0.3%, -0.6%), March PPI Final Demand YoY (0.5%, 1.3%), April 4 Initial Jobless Claims (5000k, 6648k), March 28 Continuing Claims (N/A, 3029k), February Final Inventories MoM (N/A, -0.5%), April Preliminary University of Michigan Sentiment (80.0, 89.1); Friday: March CPI MoM (-0.3%, 0.1%), March CPI YoY (1.6%, 2.3%), March Monthly Budget Statement (N/A, -$235.3b).
Posted on Monday, April 6, 2020 @ 8:42 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.