March 17, 2020 Headlines

U.S. equities are attempting to rebound following yesterday’s 13% decline (biggest drop since Black Monday in 1987). S&P 500 futures traded limit up when the overnight session began but are currently up just more than 1% as volatility persists. The Treasury curve is modestly steeper, with long-end yields 6-8 bps higher. The House passed the revised emergency bill last night, and the White House is reportedly seeking a $850 billion phase three stimulus package to combat the economic fallout of the COVID-19 crisis. Policymakers are also keeping a close eye on short-term funding markets. Commercial paper markets, which corporations use for short-term funding, are fractured, and the stress is spilling into all other short-term markets, including repo. Overnight repo rates are trading more than 50 bps above IOER, and 3-month Libor reset 16 bps higher to 1.05%, the biggest one-day jump since October 2008. The Fed is reportedly working diligently on this issue in coordination with the Treasury Department and is expected to announce measures to relieve this stress soon. Lastly, there also reports that 8 large banks used the Fed’s discount window yesterday in an attempt to remove the stigma of using that funding facility.

Jason Haley
Chief Investment Officer

3/16/2020Empire Manufacturing3-21.512.9
3/16/2020Net Long-term TIC Flows$20.9b$85.6b
3/16/2020Total Net TIC Flows$122.9b$78.2b$78.7b
3/17/2020Retail Sales Advance MoM0.20%-0.50%0.30%0.60%
3/17/2020Retail Sales Ex Auto MoM0.10%-0.40%0.30%0.60%
3/17/2020Retail Sales Ex Auto and Gas0.30%-0.20%0.40%0.70%
3/17/2020Retail Sales Control Group0.40%0.00%0.00%0.40%
3/17/2020Industrial Production MoM0.40%0.60%-0.30%-0.50%
3/17/2020Capacity Utilization77.10%77.00%76.80%76.60%
3/17/2020Manufacturing (SIC) Production0.20%0.10%-0.10%-0.20%
3/17/2020Business Inventories-0.10%0.10%
3/17/2020JOLTS Job Openings64006423
3/17/2020NAHB Housing Market Index7374
3/18/2020MBA Mortgage Applications55.40%
3/18/2020Housing Starts1500k1567k
3/18/2020Housing Starts MoM-4.30%-3.60%
3/18/2020Building Permits1500k1551k1550k
3/18/2020Building Permits MoM-3.20%9.20%
3/19/2020Current Account Balance-$108.5b-$124.1b
3/19/2020Philadelphia Fed Business Outlook1036.7
3/19/2020Initial Jobless Claims220k211k
3/19/2020Continuing Claims1738k1722k
3/19/2020Bloomberg Economic Expectations57.5
3/19/2020Bloomberg Consumer Comfort62.7
3/19/2020Leading Index0.10%0.80%
3/20/2020Existing Home Sales5.51m5.46m
3/20/2020Existing Home Sales MoM0.90%-1.30%






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