The Treasury curve is lower and flatter this morning with the 10-year down 2 basis points to 2.78%. Uncertainty has been the word on everyone’s lips; as no one really knows what to expect from the trade war between the US and China, the Fed, or what will happen in Washington with a new Congress. As a result, risk assets have taken it on the chin to end the year. The NASDAQ is down roughly 19.5% from the peak back in August, brushing against the 20% demarcation that represents a bear market.

In terms of data, third quarter GDP was revised lower in the third estimate that came out this morning to 3.4% from 3.5%. The main driver of the decline was downward revisions to consumer spending and exports; with gasoline and other energy products pulling consumer spending down, while falling exports of capital goods dragged exports lower.

Hafizan Hamzah
Director, Investment Management Group


12/17Empire Manufacturing2010.923.3
12/17NAHB Housing Market Index605660
12/17Total Net TIC Flows$42.0b-$29.1b-$29.2b
12/17Net Long-term TIC Flows$31.3b$30.8b
12/18Housing Starts1226k1256k1228k1217k
12/18Housing Starts MoM-0.20%3.20%1.50%-1.60%
12/18Building Permits1260k1328k1263k1265k
12/18Building Permits MoM-0.40%5.00%-0.60%-0.40%
12/19MBA Mortgage Applications-5.80%1.60%
12/19Current Account Balance-$125.0b-$124.8b-$101.5b-$101.2b
12/19Existing Home Sales5.20m5.32m5.22m
12/19Existing Home Sales MoM-0.40%1.90%1.40%
12/19FOMC Rate Decision (Upper Bound)2.50%2.50%2.25%
12/19FOMC Rate Decision (Lower Bound)2.25%2.25%2.00%
12/19Interest Rate on Excess Reserves2.40%2.40%2.20%
12/20Philadelphia Fed Business Outlook159.412.9
12/20Initial Jobless Claims215k214k206k
12/20Continuing Claims1663k1688k1661k
12/20Bloomberg Consumer Comfort58.859.4
12/20Bloomberg Economic Expectations5056
12/20Leading Index0.00%0.20%0.10%-0.30%
12/21GDP Annualized QoQ3.50%3.40%3.50%
12/21Personal Consumption3.60%3.50%3.60%
12/21GDP Price Index1.70%1.80%1.70%
12/21Core PCE QoQ1.50%1.60%1.50%
12/21Durable Goods Orders1.60%0.80%-4.30%
12/21Durables Ex Transportation0.30%-0.30%0.20%0.40%
12/21Cap Goods Orders Nondef Ex Air0.20%-0.60%0.00%0.50%
12/21Cap Goods Ship Nondef Ex Air0.20%-0.10%0.30%0.80%
12/21Personal Income0.30%0.50%
12/21Personal Spending0.30%0.60%
12/21Real Personal Spending0.30%0.40%
12/21PCE Deflator MoM0.00%0.20%
12/21PCE Deflator YoY1.80%2.00%
12/21PCE Core MoM0.20%0.10%
12/21PCE Core YoY1.90%1.80%
12/21U. of Mich. Sentiment97.497.5
12/21U. of Mich. Current Conditions115.2
12/21U. of Mich. Expectations86.1
12/21U. of Mich. 1 Yr Inflation2.70%
12/21U. of Mich. 5-10 Yr Inflation2.40%
12/21Kansas City Fed Manf. Activity1315