US Economy and Credit Markets Ended Dec. 4, 2020

Last week U.S. Treasury bond yields increased towards the long-end of the yield curve. A bipartisan push towards fiscal stimulus made the headlines throughout the week, which pushed long-term Treasury yields higher and steepened the yield curve. On Thursday, House Speaker Nancy Pelosi and Senate Majority Leader Mitch McConnell spoke for the first time since the 2020 election. Encouragingly, both sides expressed a commitment towards completing an omnibus to prevent a government shutdown and a coronavirus relief package before December 11th, the last day of government funding. Treasury yields fell on Friday, led by the long-end of the yield curve, on a mixed November jobs report. Nonfarm payrolls rose 245,000 in November but were off the consensus expectation by 215,000. The payrolls miss was largely due to a decline in retail jobs, led by softer-than-expected seasonal retail hiring as shoppers avoid in-store shopping, and a decline in government jobs, largely due to the conclusion of the census. On a positive note, the unemployment rate dropped to 6.7% in November, a 0.2% improvement since October. Major economic reports (related consensus forecasts, prior data) for the upcoming week include Tuesday: November NFIB Small Business Optimism (102.4, 104.0); Wednesday: December 4 MBA Mortgage Applications (n/a, -0.6%), October Final Wholesale Inventories MoM ( 0.9%, 0.9%); Thursday: December 5 Initial Jobless Claims (725k, 712k) November CPI MoM (0.1%, 0.0%), November CPI YoY (1.1%, 1.2%), November 28 Continuing Claims (n/a, 5520k), December 6 Bloomberg Consumer Comfort (n/a, 49.3), November Monthly Budget Statement (-$200.0b, -$284.1b); Friday: November Final Demand MoM (0.1%, 0.3%), November Final Demand YoY (0.7%, 0.5%), December Preliminary University of Michigan Sentiment (76.0, 76.9).
Posted on Monday, December 7, 2020 @ 8:11 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.