March 2, 2020 Headlines

After the precipitous -11.5% decline in the S&P 500 last week, volatility remained high over the weekend fluctuating on news surrounding the coronavirus. Initially, 10-year yields rallied, and equities moved lower on horrific Chinese PMI data. While the market expected a deterioration in the data, the headline manufacturing PMI reading showed 35.7 compared to an expected 45 and non-manufacturing 29.6 versus consensus estimates of 50.5. To help put into context, a survey reading above 50 represents an expansion whereas, below 50 a contraction. However, there was a complete turnaround once the Bank of Japan promised to provide ample liquidity. The move was later demonstrated after the central bank purchased a record 101 billion yuan in ETFs. Following the Federal Reserve’s rare statement on Friday that opened the door for a rate cut based on “evolving risks”, other major central banks have followed suite with supportive measures to provide liquidity and ensure stability. Money markets are now pricing in a 50bps rate cut by the Federal Reserve this month as 3-month Libor dropped by 21bps which is the largest drop since December 2008. Some participants have even suggested a rate cut could come before the scheduled March 18th meeting. Currently, the 10-year is down 7bps to 1.08% and the S&P 500 up .40%.

Chris Eckhoff
Associate, Investment Management Group

3/2/2020Markit US Manufacturing PMI50.850.8
3/2/2020Construction Spending MoM0.60%-0.20%
3/2/2020ISM Manufacturing50.550.9
3/2/2020ISM New Orders51.852
3/2/2020ISM Prices Paid50.853.3
3/2/2020ISM Employment47.546.6
3/3/2020Wards Total Vehicle Sales16.80m16.84m
3/4/2020MBA Mortgage Applications1.50%
3/4/2020ADP Employment Change170k291k
3/4/2020Markit US Services PMI49.449.4
3/4/2020Markit US Composite PMI49.6
3/4/2020ISM Non-Manufacturing Index5555.5
3/4/2020U.S. Federal Reserve Releases Beige Book
3/5/2020Challenger Job Cuts YoY27.80%
3/5/2020Nonfarm Productivity1.30%1.40%
3/5/2020Unit Labor Costs1.40%1.40%
3/5/2020Initial Jobless Claims215k219k
3/5/2020Continuing Claims1738k1724k
3/5/2020Bloomberg Consumer Comfort63.5
3/5/2020Factory Orders-0.10%1.80%
3/5/2020Factory Orders Ex Trans0.60%
3/5/2020Durable Goods Orders-0.20%-0.20%
3/5/2020Durables Ex Transportation0.90%
3/5/2020Cap Goods Orders Nondef Ex Air1.10%
3/5/2020Cap Goods Ship Nondef Ex Air1.10%
3/6/2020Trade Balance-$46.4b-$48.9b
3/6/2020Change in Nonfarm Payrolls175k225k
3/6/2020Two-Month Payroll Net Revision7k
3/6/2020Change in Private Payrolls160k206k
3/6/2020Change in Manufact. Payrolls-4k-12k
3/6/2020Unemployment Rate3.60%3.60%
3/6/2020Average Hourly Earnings MoM0.30%0.20%
3/6/2020Average Hourly Earnings YoY3.00%3.10%
3/6/2020Average Weekly Hours All Employees34.334.3
3/6/2020Labor Force Participation Rate63.40%63.40%
3/6/2020Underemployment Rate6.90%
3/6/2020Wholesale Inventories MoM-0.20%-0.20%
3/6/2020Wholesale Trade Sales MoM-0.70%
3/6/2020Consumer Credit$16.750b$22.055b



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