August 24, 2021 Headlines

A mild risk-on trade overnight has Treasury yields slightly higher out the curve to start the day. House Speaker Nancy Pelosi continues to negotiate with moderate Democrats over how to move forward with President Biden’s spending initiatives, including a $3.5 trillion budget resolution and the $550 billion infrastructure package recently passed in the Senate. Centrist members want to move forward with the infrastructure bill now and are threatening to withhold support for the larger budget resolution until it is put up for a vote. The goal for Democrat leaders in both the House and Senate is to pass the larger budget resolution through reconciliation, which could be done with no Republican support in the Senate assuming all Democrats vote for it.  In the meantime, the debt ceiling expired on July 31, and the Treasury Department should be able to continue operating without an extension for another 2-3 months using extraordinary measures. However, the reduction in T-bill issuance until the ceiling is lifted while the Fed continues to pump in liquidity puts continued pressure on the money market complex already struggling with supply/demand imbalances.

Jason Haley
Chief Investment Officer

08/23/21Chicago Fed Nat Activity Index0.120.530.09-0.01
08/23/21Markit US Manufacturing PMI6261.263.4
08/23/21Markit US Services PMI59.255.259.9
08/23/21Markit US Composite PMI55.459.9
08/23/21Existing Home Sales5.83m5.99m5.86m5.87m
08/23/21Existing Home Sales MoM-0.50%2.00%1.40%1.60%
08/24/21Richmond Fed Manufact. Index2427
08/24/21New Home Sales697k676k
08/24/21New Home Sales MoM3.10%-6.60%
08/25/21MBA Mortgage Applications-3.90%
08/25/21Durable Goods Orders-0.30%0.90%
08/25/21Durables Ex Transportation0.50%0.50%
08/25/21Cap Goods Orders Nondef Ex Air0.50%0.70%
08/25/21Cap Goods Ship Nondef Ex Air0.70%0.60%
08/26/21Initial Jobless Claims350k348k
08/26/21Continuing Claims2764k2820k
08/26/21GDP Annualized QoQ6.70%6.50%
08/26/21Personal Consumption12.20%11.80%
08/26/21GDP Price Index6.00%6.00%
08/26/21Core PCE QoQ6.10%6.10%
08/26/21Langer Consumer Comfort56.5
08/26/21Kansas City Fed Manf. Activity2530
08/27/21Advance Goods Trade Balance-$90.9b-$91.2b
08/27/21Wholesale Inventories MoM1.00%1.10%
08/27/21Retail Inventories MoM0.30%0.30%
08/27/21Personal Income0.30%0.10%
08/27/21Personal Spending0.40%1.00%
08/27/21Real Personal Spending0.00%0.50%
08/27/21PCE Deflator MoM0.40%0.50%
08/27/21PCE Deflator YoY4.10%4.00%
08/27/21PCE Core Deflator MoM0.30%0.40%
08/27/21PCE Core Deflator YoY3.60%3.50%
08/27/21U. of Mich. Sentiment70.870.2
08/27/21U. of Mich. Current Conditions77.9
08/27/21U. of Mich. Expectations65.2
08/27/21U. of Mich. 1 Yr Inflation4.60%
08/27/21U. of Mich. 5-10 Yr Inflation3.00%

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