February 28, 2020 Headlines

Another day, another flight-to-quality trade in global markets. Treasury yields are down 4-12 basis points from yesterday, with short-term rates leading the charge this time. In fact, 3-month LIBOR declined 11.8 bps from yesterday, the biggest one-day decline since December 2008 as short-term markets price for a more dovish Fed. The fed funds futures markets was pricing for just two rates cuts in 2020 last Friday, with the earliest one not coming until the July FOMC meeting. Today the market is pricing a 100% probability of a March rate cut and more than 3 cuts in 2020. Fed leaders have been careful not to appear reactive to this point. Earlier this week, Fed Vice Chair Richard Clarida said it was still too soon to say whether the coronavirus materially changes the U.S. economic outlook. However, the market is now putting a lot of pressure on the central bank to respond, and any upcoming Fedspeak will be closely monitored, beginning with Jim Bullard’s speech this morning. On the data front, January personal income grew more than expected (+0.6% vs. +0.4%), but spending came in just below expectations. Additionally, core PCE growth was less than expected on both a monthly and year-over-year basis.

Jason Haley
Chief Investment Officer

2/24/2020Chicago Fed Nat Activity Index-0.18-0.25-0.35-0.51
2/24/2020Dallas Fed Manf. Activity01.2-0.2
2/25/2020House Price Purchase Index QoQ1.30%1.10%1.20%
2/25/2020FHFA House Price Index MoM0.40%0.60%0.20%0.30%
2/25/2020S&P CoreLogic CS 20-City MoM SA0.40%0.43%0.48%0.47%
2/25/2020S&P CoreLogic CS 20-City YoY NSA2.85%2.85%2.55%2.54%
2/25/2020S&P CoreLogic CS 20-City NSA Index218.73218.68218.65
2/25/2020S&P CoreLogic CS US HPI YoY NSA3.60%3.75%3.54%3.46%
2/25/2020S&P CoreLogic CS US HPI NSA Index212.59212.56212.42
2/25/2020Conf. Board Consumer Confidence132.2130.7131.6130.4
2/25/2020Conf. Board Expectations107.8102.5101.4
2/25/2020Conf. Board Present Situation165.1175.3173.9
2/25/2020Richmond Fed Manufact. Index10-220
2/26/2020MBA Mortgage Applications1.50%-6.40%
2/26/2020New Home Sales718k764k694k708k
2/26/2020New Home Sales MoM3.50%7.90%-0.40%2.30%
2/27/2020GDP Annualized QoQ2.10%2.10%2.10%
2/27/2020Personal Consumption1.70%1.70%1.80%
2/27/2020GDP Price Index1.40%1.30%1.40%
2/27/2020Core PCE QoQ1.30%1.20%1.30%
2/27/2020Durable Goods Orders-1.40%-0.20%2.40%2.90%
2/27/2020Durables Ex Transportation0.20%0.90%-0.10%0.10%
2/27/2020Cap Goods Orders Nondef Ex Air0.10%1.10%-0.80%-0.50%
2/27/2020Cap Goods Ship Nondef Ex Air0.00%1.10%-0.30%-0.10%
2/27/2020Initial Jobless Claims212k219k210k211k
2/27/2020Continuing Claims1711k1724k1726k1733k
2/27/2020Bloomberg Consumer Comfort63.565.6
2/27/2020Revisions: Pending Home Sales
2/27/2020Pending Home Sales MoM3.00%5.20%-4.90%-4.30%
2/27/2020Pending Home Sales NSA YoY2.10%6.70%6.80%
2/27/2020Kansas City Fed Manf. Activity-15-1
2/28/2020Advance Goods Trade Balance-$68.5b-$65.5b-$68.3b-$68.7b
2/28/2020Wholesale Inventories MoM0.10%-0.20%-0.20%-0.30%
2/28/2020Retail Inventories MoM0.20%0.00%0.00%-0.10%
2/28/2020Personal Income0.40%0.60%0.20%0.10%
2/28/2020Personal Spending0.30%0.20%0.30%0.40%
2/28/2020Real Personal Spending0.20%0.10%0.10%
2/28/2020PCE Deflator MoM0.20%0.10%0.30%
2/28/2020PCE Deflator YoY1.80%1.70%1.60%1.50%
2/28/2020PCE Core Deflator MoM0.20%0.10%0.20%
2/28/2020PCE Core Deflator YoY1.70%1.60%1.60%1.50%
2/28/2020MNI Chicago PMI4642.9
2/28/2020U. of Mich. Sentiment100.7100.9
2/28/2020U. of Mich. Current Conditions113.8
2/28/2020U. of Mich. Expectations92.6
2/28/2020U. of Mich. 1 Yr Inflation2.50%
2/28/2020U. of Mich. 5-10 Yr Inflation2.30%


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