A risk-off trade emerged again overnight, sending US equity futures lower and Treasury prices higher. Market sentiment rebounded yesterday afternoon when the World Health Organization (WHO) officially declared the coronavirus outbreak a global emergency (i.e., more serious/coordinated response to the issue), which sparked a 1.3% rebound in the S&P 500 from yesterday’s low. This morning’s negative sentiment is related to a soft Q4 GDP report for the eurozone, as well as a general unwillingness to be short equities or fixed income going in to the weekend with Chinese stock markets opening Monday for the first time since January 23.
Personal income and spending were largely in line with expectations for December. PCE inflation metrics were higher than expected for December on a month-over-month basis, with headline PCE rising 0.3% (0.2% expected) and core PCE rising 0.2% (0.1% expected). Year-over-year PCE metrics were as expected, with both headline and core readings at a 1.6% rate.
Chief Investment Officer
|1/31/2020||Real Personal Spending||0.10%||0.10%||0.30%||—|
|1/31/2020||PCE Deflator MoM||0.20%||0.30%||0.20%||0.10%|
|1/31/2020||PCE Deflator YoY||1.60%||1.60%||1.50%||1.40%|
|1/31/2020||PCE Core Deflator MoM||0.10%||0.20%||0.10%||—|
|1/31/2020||PCE Core Deflator YoY||1.60%||1.60%||1.60%||1.50%|
|1/31/2020||Employment Cost Index||0.70%||0.70%||0.70%||—|
|1/31/2020||MNI Chicago PMI||48.9||—||48.9||48.2|
|1/31/2020||U. of Mich. Sentiment||99.1||—||99.1||—|
|1/31/2020||U. of Mich. Current Conditions||—||—||115.8||—|
|1/31/2020||U. of Mich. Expectations||—||—||88.3||—|
|1/31/2020||U. of Mich. 1 Yr Inflation||—||—||2.50%||—|
|1/31/2020||U. of Mich. 5-10 Yr Inflation||—||—||2.50%||—|
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