December 16, 2020 Headlines

Treasury yields are higher across the curve this morning despite a disappointing November retail sales report. A strong flash December PMI report for the Eurozone, including both manufacturing and services components, led the rates sell-off overnight, and encouraging comments from Senate Majority Leader Mitch McConnell regarding stimulus negotiations have also contributed to this morning’s tone. Advance retail sales fell 1.1% in November, well below expectations for a more modest 0.3% decline. Ex-auto sales were expected to increase 0.1% over the month but instead fell 0.9%, and the retail sales control group, which is used in the GDP calculation, fell 0.5% versus expectations of a 0.2% gain. This will likely lead many economists to soften their Q4 GDP forecast. The FOMC decision will be released this afternoon. While no major policy changes are expected, the committee discussed potentially enhancing forward guidance for asset purchases during the last meeting on November 5, and they will also release an updated Summary of Economic Projections.

Jason Haley
Chief Investment Officer

Date TimeEventSurveyActualPriorRevised
12/16/2020MBA Mortgage Applications1.10%-1.20%
12/16/2020Retail Sales Advance MoM-0.30%-1.10%0.30%-0.10%
12/16/2020Retail Sales Ex Auto MoM0.10%-0.90%0.20%-0.10%
12/16/2020Retail Sales Ex Auto and Gas0.10%-0.80%0.20%-0.10%
12/16/2020Retail Sales Control Group0.20%-0.50%0.10%-0.10%
12/16/2020Markit US Manufacturing PMI55.856.7
12/16/2020Markit US Services PMI55.958.4
12/16/2020Markit US Composite PMI58.6
12/16/2020Business Inventories0.60%0.70%
12/16/2020NAHB Housing Market Index8890
12/16/2020FOMC Rate Decision (Upper Bound)0.25%0.25%
12/16/2020FOMC Rate Decision (Lower Bound)0.00%0.00%
12/16/2020Interest Rate on Excess Reserves0.10%0.10%
12/17/2020Building Permits1560k1545k1544k
12/17/2020Building Permits MoM1.00%0.00%-0.10%
12/17/2020Philadelphia Fed Business Outlook2026.3
12/17/2020Housing Starts1535k1530k
12/17/2020Initial Jobless Claims813k853k
12/17/2020Housing Starts MoM0.30%4.90%
12/17/2020Continuing Claims5700k5757k
12/17/2020Bloomberg Economic Expectations43
12/17/2020Bloomberg Consumer Comfort49
12/17/2020Kansas City Fed Manf. Activity911
12/18/2020Current Account Balance-$187.0b-$170.5b
12/18/2020Leading Index0.50%0.70%

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