US Economy and Credit Markets Ended Jan. 15, 2021
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Making news last week was President-elect Joe Biden's proposed $1.9 trillion stimulus package, including $1,400 stimulus checks for individuals and aid for state and local governments. The announced amount seemed to be less than what was being anticipated by markets as equities were weak, gold little changed and bond yields only making small gains. For the week, oil prices continued to rise on the back of the January 5th surprise OPEC cut and generally weak dollar. Mid-week news included Wednesday's Consumer Price Index data which registered a 0.4% increase for December as energy prices rose 4.0%. Last Friday was littered with economic reports. Industrial Production was found increasing for December and easily beat consensus expectations of 0.5% with a 1.6% gain. This was the third consecutive month of rising industrial production and utilities led the way with a 6.3% increase as December temperatures fell increasing heating demand. Producer Prices (the PPI) rose 0.3% on the back of a 5.5% increase in energy prices. Goods and services also had small increases. Producer prices excluding food and energy were up 1.2% this past year. The Friday Retail Sales report disappointed with a 0.7% December decline. The decline is attributed to the decline in stimulus as the latest round of stimulus checks were not sent until the end of the month. Major economic reports (related consensus forecasts, prior data) for the upcoming week include Wednesday: January 15 MBA Mortgage Applications (N/A, 16.7%); Thursday: January 15 Initial Jobless Claims (885k, 965k) and December Housing Starts (1.56M, 1.55M); Friday: January preliminary Markit US Manufacturing PMI (56.5, 57.1) and December Existing Home Sales (6.55M, 6.69M).
Posted on Tuesday, January 19, 2021 @ 8:09 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.