US Economy and Credit Markets Ended June 26, 2020
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Treasury yields dropped moderately over the course of the week as coronavirus fears led investors to a more risk-off approach. States across the southern part of the United States, including Texas, Florida, Arizona and California, reported record numbers of new cases at some point during the week, leading several states to implement new lock-downs or pausing their states opening plans. This has led investors to seek the perceived safety of Treasurys and push yields lower. States in the Northeast, including New York, New Jersey and Connecticut, which experienced a peak from the virus months ago, have imposed a two-week quarantine on visitors from states where the spread is currently high. Internationally, investors began to worry about trade relations, but President Trump said that the trade deal with China was "intact." There has also been some concern that the U.S. was considering tariffs on the European Union due to a dispute involving Boeing from the U.S. and Airbus from the EU. On Thursday, initial jobless claims were 1.5M, exceeding expectations by 150k, but continuing claims dropped 1.0M to 19.5M, beating expectations of 20.0M. Durable goods orders were up 15.8%, beating estimates of 10.5% after dropping 17.7% the previous month. Major economic reports (related consensus forecasts, prior data) for the upcoming holiday-shortened week include Tuesday: June MNI Chicago PMI (44.5, 32.3), June Conf. Board Consumer Confidence (90.0, 86.6); Wednesday: June 26 MBA Mortgage Applications (n/a, -8.7%), June ADP Employment Change (2900k, -2760k), June Final Markit US Manufacturing PMI (49.6, 49.6), May Construction Spending MoM (1.0%, -2.9%), June ISM Manufacturing (49.4, 43.1), Thursday: May Trade Balance (-$52.3B, -$49.9B), June Change in Nonfarm Payrolls (3000k, 2509k), June Unemployment Rate (12.3%, 13.3%).
Posted on Monday, June 29, 2020 @ 8:05 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.