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 Time Event Survey Actual Prior Revised
12/16/2020 MBA Mortgage Applications — 1.10% -1.20% —
12/16/2020 Retail Sales Advance MoM -0.30% -1.10% 0.30% -0.10%
12/16/2020 Retail Sales Ex Auto MoM 0.10% -0.90% 0.20% -0.10%
12/16/2020 Retail Sales Ex Auto and Gas 0.10% -0.80% 0.20% -0.10%
12/16/2020 Retail Sales Control Group 0.20% -0.50% 0.10% -0.10%
12/16/2020 Markit US Manufacturing PMI 55.8 — 56.7 —
12/16/2020 Markit US Services PMI 55.9 — 58.4 —
12/16/2020 Markit US Composite PMI — — 58.6 —
12/16/2020 Business Inventories 0.60% — 0.70% —
12/16/2020 NAHB Housing Market Index 88 — 90 —
12/16/2020 FOMC Rate Decision (Upper Bound) 0.25% — 0.25% —
12/16/2020 FOMC Rate Decision (Lower Bound) 0.00% — 0.00% —
12/16/2020 Interest Rate on Excess Reserves 0.10% — 0.10% —
12/17/2020 Building Permits 1560k — 1545k 1544k
12/17/2020 Building Permits MoM 1.00% — 0.00% -0.10%
12/17/2020 Philadelphia Fed Business Outlook 20 — 26.3 —
12/17/2020 Housing Starts 1535k — 1530k —
12/17/2020 Initial Jobless Claims 813k — 853k —
12/17/2020 Housing Starts MoM 0.30% — 4.90% —
12/17/2020 Continuing Claims 5700k — 5757k —
12/17/2020 Bloomberg Economic Expectations — — 43 —
12/17/2020 Bloomberg Consumer Comfort — — 49 —
12/17/2020 Kansas City Fed Manf. Activity 9 — 11 —
12/18/2020 Current Account Balance -$187.0b — -$170.5b —
12/18/2020 Leading Index 0.50% — 0.70% —

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