The rout in global risk markets continued overnight. Major Asian and European equity indices are down 4-8%, and U.S. equity futures are down nearly 5% ahead of the open. Additionally, a potential pricing war between Russia and Saudi Arabia has sent oil prices plunging as much as 31%, the worst daily decline since 1991. Both countries are poised to flood the market with supply at a time when demand is waning amid the coronavirus outbreak. Treasuries are the primary beneficiaries of the global market meltdown, with long-end yields down 30-40 bps on the day (10yr yield at 0.42%). Rates markets continue to price for a significant stimulus response from global policymakers, including the Fed sending the funds rate to the zero bound in the coming weeks/months. The question now is how quickly can the virus be contained? If the virus continues to spread into Q3, a global recession is a much higher probability. If new cases peak in April/May, there’s a better chance for a strong recovery in 2H 2020, particularly for the U.S. The uncertainty with regards to both scenarios is fueling the sharp sell-off in risk markets, and backwards-looking economic data like the February jobs report doesn’t have much relevance at this point.
Jason Haley
Chief Investment Officer
Date | Event | Survey | Actual | Prior | Revised |
3/10/2020 | NFIB Small Business Optimism | 103 | — | 104.3 | — |
3/11/2020 | MBA Mortgage Applications | — | — | 15.10% | — |
3/11/2020 | Real Avg Hourly Earning YoY | — | — | 0.60% | 0.50% |
3/11/2020 | CPI MoM | 0.00% | — | 0.10% | — |
3/11/2020 | CPI Ex Food and Energy MoM | 0.20% | — | 0.20% | — |
3/11/2020 | CPI YoY | 2.20% | — | 2.50% | — |
3/11/2020 | CPI Ex Food and Energy YoY | 2.30% | — | 2.30% | — |
3/11/2020 | CPI Index NSA | 258.493 | — | 257.971 | — |
3/11/2020 | CPI Core Index SA | 266.913 | — | 266.476 | — |
3/11/2020 | Real Avg Weekly Earnings YoY | — | — | 0.00% | — |
3/11/2020 | Monthly Budget Statement | -$234.5b | — | -$234.0b | — |
3/12/2020 | PPI Final Demand MoM | -0.10% | — | 0.50% | — |
3/12/2020 | PPI Ex Food and Energy MoM | 0.10% | — | 0.50% | — |
3/12/2020 | PPI Ex Food, Energy, Trade MoM | 0.10% | — | 0.40% | — |
3/12/2020 | PPI Final Demand YoY | 1.80% | — | 2.10% | — |
3/12/2020 | PPI Ex Food and Energy YoY | 1.70% | — | 1.70% | — |
3/12/2020 | Initial Jobless Claims | 220k | — | 216k | — |
3/12/2020 | PPI Ex Food, Energy, Trade YoY | — | — | 1.50% | — |
3/12/2020 | Continuing Claims | 1733k | — | 1729k | — |
3/12/2020 | Bloomberg Consumer Comfort | — | — | 63 | — |
3/12/2020 | Household Change in Net Worth | — | — | $574b | — |
3/13/2020 | Import Price Index MoM | -1.00% | — | 0.00% | — |
3/13/2020 | Import Price Index ex Petroleum MoM | 0.10% | — | 0.20% | — |
3/13/2020 | Import Price Index YoY | -1.50% | — | 0.30% | — |
3/13/2020 | Export Price Index MoM | -0.40% | — | 0.70% | — |
3/13/2020 | Export Price Index YoY | — | — | 0.50% | — |
3/13/2020 | Bloomberg March United States Economic Survey | ||||
3/13/2020 | U. of Mich. Sentiment | 95 | — | 101 | — |
3/13/2020 | U. of Mich. Current Conditions | 113 | — | 114.8 | — |
3/13/2020 | U. of Mich. Expectations | 88.2 | — | 92.1 | — |
3/13/2020 | U. of Mich. 1 Yr Inflation | 2.40% | — | 2.40% | — |
3/13/2020 | U. of Mich. 5-10 Yr Inflation | — | — | 2.30% | — |
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