Treasuries are rallying modestly this morning in response to the Bank of Japan coming in with a second bond purchase operation this week as well as a Core PCE reading that showed inflation coming in lower than expected. Equity markets are mixed this morning as investors continue to digest disappointing earnings from the likes of Twitter and Exxon Mobil.

As was mentioned above, second quarter GDP came in slightly lower than expected at 4.1% vs 4.2% on an annualized basis. However, this reading was the fastest pace of expansion since 2014 and the growth was boosted by an uptick in consumer spending, which hit 4.0%. Delving deeper into the numbers reveals that net exports contributed 1.06% as soybean shipments increased in an effort to get ahead of the retaliatory tariffs placed on the crop. As a result of this spike in trade, most economists expect this growth rate to be an exception rather than the rule going forward, with GDP growth expected to settle back in to its long-run rate.

Hafizan Hamzah
Director, Investment Management Group

Date TimeEventSurveyActualPriorRevised
07/23/2018Chicago Fed Nat Activity Index0.250.43-0.15-0.45
07/23/2018Existing Home Sales5.44m5.38m5.43m5.41m
07/23/2018Existing Home Sales MoM0.20%-0.60%-0.40%-0.70%
07/24/2018FHFA House Price Index MoM0.30%0.20%0.10%0.20%
07/24/2018Markit US Manufacturing PMI55.155.555.4
07/24/2018Markit US Services PMI56.356.256.5
07/24/2018Markit US Composite PMI55.956.2
07/24/2018Richmond Fed Manufact. Index18202021
07/25/2018MBA Mortgage Applications-0.20%-2.50%
07/25/2018New Home Sales668k631k689k666k
07/25/2018New Home Sales MoM-3.10%-5.30%6.70%3.90%
07/26/2018Advance Goods Trade Balance-$67.0b-$68.3b-$64.8b
07/26/2018Wholesale Inventories MoM0.30%0.00%0.60%0.40%
07/26/2018Retail Inventories MoM0.00%0.40%
07/26/2018Initial Jobless Claims215k217k207k208k
07/26/2018Continuing Claims1733k1745k1751k1753k
07/26/2018Durable Goods Orders3.00%1.00%-0.40%-0.30%
07/26/2018Durables Ex Transportation0.50%0.40%0.00%0.30%
07/26/2018Cap Goods Orders Nondef Ex Air0.50%0.60%0.30%0.70%
07/26/2018Cap Goods Ship Nondef Ex Air0.40%1.00%0.20%
07/26/2018Bloomberg Consumer Comfort5958.8
07/26/2018Kansas City Fed Manf. Activity252328
07/27/2018Revisions: GDP
07/27/2018GDP Annualized QoQ4.20%4.10%2.00%2.20%
07/27/2018Personal Consumption3.00%4.00%0.90%0.50%
07/27/2018GDP Price Index2.30%3.00%2.20%2.00%
07/27/2018Core PCE QoQ2.20%2.00%2.30%2.20%
07/27/2018U. of Mich. Sentiment97.197.1
07/27/2018U. of Mich. Current Conditions113.9
07/27/2018U. of Mich. Expectations86.4
07/27/2018U. of Mich. 1 Yr Inflation2.90%
07/27/2018U. of Mich. 5-10 Yr Inflation2.40%