There was decent follow through to yesterday’s rally in U.S. stocks in global markets overnight. The Nikkei closed up 1.5%, and the Euro Stoxx is currently up 0.9% (S&P 500 futures +19 points). Yesterday U.S. stocks broke from the recent trend and finished higher despite a strong sell-off in long-end Treasuries. Yields are higher again this morning, although there has been better buying as the morning has progressed. Decent selling in Eurodollar futures overnight has pushed LIBOR fixings higher again today as well, with the 3-month rate up 2 bps to 1.87%, and the December 2018 Eurodollar contract is up to 2.47% (+10 bps over last two days). On the fiscal front, President Trump is said to be proposing a 25-cent hike in the gasoline tax during discussions with Congressional leaders to help pay for an infrastructure spending plan. According to the Washington Post, Republican leaders are lukewarm on the idea, particularly during an election year.

Jason Haley
Managing Director, Investment Management Group

02/12Monthly Budget Statement$51.0b$49.2b$51.3b
02/13NFIB Small Business Optimism105.3106.9104.9
02/13Revisions: Producer Price Index
02/14MBA Mortgage Applications-4.10%0.70%
02/14CPI MoM0.30%0.50%0.10%0.20%
02/14CPI Ex Food and Energy MoM0.20%0.30%0.30%0.20%
02/14CPI YoY1.90%2.10%2.10%
02/14CPI Ex Food and Energy YoY1.70%1.80%1.80%
02/14CPI Index NSA247.604247.867246.524
02/14CPI Core Index SA255.287254.426254.398
02/14Retail Sales Advance MoM0.20%-0.30%0.40%0.00%
02/14Retail Sales Ex Auto MoM0.50%0.00%0.40%0.10%
02/14Retail Sales Ex Auto and Gas0.30%-0.20%0.40%0.00%
02/14Retail Sales Control Group0.40%0.00%0.30%-0.20%
02/14Real Avg Weekly Earnings YoY0.40%0.70%0.90%
02/14Real Avg Hourly Earning YoY0.80%0.40%0.60%
02/14Business Inventories0.30%0.40%0.40%
02/14Bloomberg Consumer Comfort5754.4
02/15Empire Manufacturing1813.117.7
02/15Initial Jobless Claims228k230k221k223k
02/15Continuing Claims1925k1942k1923k1927k
02/15PPI Final Demand MoM0.40%0.40%-0.10%0.00%
02/15PPI Ex Food and Energy MoM0.20%0.40%-0.10%
02/15PPI Ex Food, Energy, Trade MoM0.20%0.40%0.10%
02/15PPI Final Demand YoY2.40%2.70%2.60%
02/15PPI Ex Food and Energy YoY2.00%2.20%2.30%
02/15PPI Ex Food, Energy, Trade YoY2.50%2.30%
02/15Philadelphia Fed Business Outlook21.825.822.2
02/15Industrial Production MoM0.20%-0.10%0.90%0.40%
02/15Manufacturing (SIC) Production0.30%0.00%0.10%0.00%
02/15Capacity Utilization78.00%77.50%77.90%77.70%
02/15NAHB Housing Market Index7272
02/15Total Net TIC Flows$33.8b
02/15Net Long-term TIC Flows$57.5b
02/16Import Price Index MoM0.60%0.10%
02/16Import Price Index ex Petroleum MoM0.10%-0.20%
02/16Import Price Index YoY3.00%3.00%
02/16Export Price Index MoM0.30%-0.10%
02/16Export Price Index YoY2.60%
02/16Housing Starts1235k1192k
02/16Housing Starts MoM3.60%-8.20%
02/16Building Permits1300k1302k1300k
02/16Building Permits MoM0.00%-0.10%-0.20%
02/16U. of Mich. Sentiment95.395.7
02/16U. of Mich. Current Conditions111.1110.5
02/16U. of Mich. Expectations87.286.3
02/16U. of Mich. 1 Yr Inflation2.70%
02/16U. of Mich. 5-10 Yr Inflation2.50%