July 16, 2021 Headlines

Treasury yields are up 2-4 bps across the curve this morning following a solid June retail sales report. Equity futures are up 22-38 bps ahead of the open, with tech leading the way amid the modest rate curve steepening. Retail sales rose 0.6% in June versus expectations of a 0.3% m/m decline, and ex-auto sales were up 1.3% (0.4% expected). The control group, which is the figure used in the GDP consumption calculation, rose 1.1% m/m, more than double expectations (0.5%). The June upside surprise was largely a result of downward revisions to May, and adjusting for the revisions, the June figures would be closer to the expected growth rates, which is still a solid month. As we discussed in our July Monthly Market Commentary, the most recent quarterly Fed report on household balance sheets painted a very healthy picture for consumption going forward following multiple rounds of fiscal stimulus as well as consumer deleveraging over the last 18 months (in aggregate). 

Jason Haley
Chief Investment Officer

7/16/2021Retail Sales Advance MoM-0.30%0.60%-1.30%-1.70%
7/16/2021Retail Sales Ex Auto MoM0.40%1.30%-0.70%-0.90%
7/16/2021Retail Sales Ex Auto and Gas0.50%1.10%-0.80%-1.00%
7/16/2021Retail Sales Control Group0.40%1.10%-0.70%-1.40%
7/16/2021Business Inventories0.50%-0.20%
7/16/2021U. of Mich. Sentiment86.585.5
7/16/2021U. of Mich. Current Conditions9188.6
7/16/2021U. of Mich. Expectations8583.5
7/16/2021U. of Mich. 1 Yr Inflation4.30%4.20%
7/16/2021U. of Mich. 5-10 Yr Inflation2.80%
7/16/2021Total Net TIC Flows$101.2b
7/16/2021Net Long-term TIC Flows$100.7b

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