Treasury yields were lower again to start the day, with the 10-year yield dropping to 1.51% before bouncing higher on a strong July retail sales report (currently 1.58%). S&P 500 futures are up 0.35% following yesterday’s 3% plunge for U.S. stocks. There were conflicting headlines overnight on U.S./China tensions. Bloomberg initially reported that China issue new threats of “countermeasures” against the recent U.S. tariffs, which sparked another risk-off trade in the markets, but it was later determined that was effectively the Chinese response from two weeks ago when the tariffs were first announced. A new headline emerged that China hopes to meet the U.S. halfway on the trade issue, which led to a recovery in risk assets.
Retail sales rose 0.7% in July, more than double expectations, and the closely watched control group was up 1% on the month versus expectations of a 0.4% gain and 0.7% the prior month. The control group excludes food, gas, building materials, and auto, and this metric is what is actually used in the GDP calculation. As discussed earlier this week, the recent domestic data trend hasn’t been all that bad. The U.S. labor market still appears to be at full employment, and core CPI was 20 bps above the Fed’s 2% target. However, the financial markets are looking forward, and the general narrative is that the trade issue has gone too far and will eventually drag the global economy into recession. In other words, markets are far more focused on the U.S./China situation than the backwards-looking domestic data trend.
Jason Haley
Managing Director, Investment Management Group
| Date | Event | Survey | Actual | Prior | Revised |
| 8/12/19 | Monthly Budget Statement | -$120.0b | -$119.7b | -$76.9b | — |
| 8/13/19 | NFIB Small Business Optimism | 104 | 104.7 | 103.3 | — |
| 8/13/19 | CPI MoM | 0.30% | 0.30% | 0.10% | — |
| 8/13/19 | CPI Ex Food and Energy MoM | 0.20% | 0.30% | 0.30% | — |
| 8/13/19 | CPI YoY | 1.70% | 1.80% | 1.60% | — |
| 8/13/19 | CPI Ex Food and Energy YoY | 2.10% | 2.20% | 2.10% | — |
| 8/13/19 | CPI Core Index SA | 263.302 | 263.569 | 262.8 | — |
| 8/13/19 | CPI Index NSA | 256.441 | 256.571 | 256.14 | — |
| 8/13/19 | Real Avg Hourly Earning YoY | — | 1.30% | 1.50% | — |
| 8/13/19 | Real Avg Weekly Earnings YoY | — | 0.80% | 1.20% | — |
| 8/13/19 | Mortgage Delinquencies | — | 4.53% | 4.42% | — |
| 8/13/19 | MBA Mortgage Foreclosures | — | 0.90% | 0.92% | — |
| 8/14/19 | MBA Mortgage Applications | — | 21.70% | 5.30% | — |
| 8/14/19 | Import Price Index MoM | -0.10% | 0.20% | -0.90% | -1.10% |
| 8/14/19 | Import Price Index ex Petroleum MoM | -0.10% | 0.00% | -0.40% | — |
| 8/14/19 | Import Price Index YoY | -2.00% | -1.80% | -2.00% | — |
| 8/14/19 | Export Price Index MoM | -0.10% | 0.20% | -0.70% | -0.60% |
| 8/14/19 | Export Price Index YoY | — | -0.90% | -1.60% | — |
| 8/15/19 | Empire Manufacturing | 2 | 4.8 | 4.3 | — |
| 8/15/19 | Nonfarm Productivity | 1.40% | 2.30% | 3.40% | 3.50% |
| 8/15/19 | Unit Labor Costs | 2.00% | 2.40% | -1.60% | 5.50% |
| 8/15/19 | Philadelphia Fed Business Outlook | 9.5 | 16.8 | 21.8 | — |
| 8/15/19 | Retail Sales Advance MoM | 0.30% | 0.70% | 0.40% | 0.30% |
| 8/15/19 | Retail Sales Ex Auto MoM | 0.40% | 1.00% | 0.40% | 0.30% |
| 8/15/19 | Retail Sales Ex Auto and Gas | 0.50% | 0.90% | 0.70% | 0.60% |
| 8/15/19 | Retail Sales Control Group | 0.40% | 1.00% | 0.70% | — |
| 8/15/19 | Initial Jobless Claims | 212k | 220k | 209k | 211k |
| 8/15/19 | Continuing Claims | 1685k | 1726k | 1684k | 1687k |
| 8/15/19 | Industrial Production MoM | 0.10% | — | 0.00% | — |
| 8/15/19 | Manufacturing (SIC) Production | -0.30% | — | 0.40% | — |
| 8/15/19 | Capacity Utilization | 77.80% | — | 77.90% | — |
| 8/15/19 | Bloomberg Consumer Comfort | — | — | 62.9 | — |
| 8/15/19 | NAHB Housing Market Index | 65 | — | 65 | — |
| 8/15/19 | Business Inventories | 0.10% | — | 0.30% | — |
| 8/15/19 | Net Long-term TIC Flows | — | — | $3.5b | — |
| 8/15/19 | Total Net TIC Flows | — | — | $32.9b | — |
| 8/16/19 | Housing Starts | 1257k | — | 1253k | — |
| 8/16/19 | Housing Starts MoM | 0.30% | — | -0.90% | — |
| 8/16/19 | Building Permits | 1270k | — | 1220k | 1232k |
| 8/16/19 | Building Permits MoM | 3.10% | — | -6.10% | -5.20% |
| 8/16/19 | U. of Mich. Sentiment | 97 | — | 98.4 | — |
| 8/16/19 | U. of Mich. Current Conditions | — | — | 110.7 | — |
| 8/16/19 | U. of Mich. Expectations | — | — | 90.5 | — |
| 8/16/19 | U. of Mich. 1 Yr Inflation | — | — | 2.60% | — |
| 8/16/19 | U. of Mich. 5-10 Yr Inflation | — | — | 2.50% | — |
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