November 10, 2020 Headlines

Treasury yields are modestly higher this morning following yesterday’s strong sell-off that steepened the yield curve by nearly 10 basis points. With Pfizer’s vaccine announcement, a reflation trade ensued by more speculative investors on the premise that the Covid recovery would accelerate much sooner than markets had been expecting. At the same time, one could reasonably say that the headline reached a market very eager for any such hints that normality may be on the visible horizon. For the fixed income market, it will be important to hear the Fed’s take on the news. Fed Chair Powell has made it clear that the Fed’s outlook (and policy bias) is tied to the Covid timeline and that the central bank will keep policy very accommodative until the recovery is well under way. Fed funds futures and OIS are still pricing the policy rate unchanged through 2023, aligned with the Fed’s current guidance. That said, momentum is a strong force, and Covid remains the biggest driver of the economic outlook, both positive and negative.

Jason Haley
Chief Investment Officer

11/10/20NFIB Small Business Optimism104.1104104
11/10/20Mortgage Delinquencies8.22%
11/10/20MBA Mortgage Foreclosures0.68%
11/10/20JOLTS Job Openings65006493
11/11/20MBA Mortgage Applications3.80%
11/12/20CPI MoM0.10%0.20%
11/12/20CPI Ex Food and Energy MoM0.20%0.20%
11/12/20CPI YoY1.30%1.40%
11/12/20CPI Ex Food and Energy YoY1.70%1.70%
11/12/20CPI Index NSA260.474260.28
11/12/20CPI Core Index SA269.576269.264
11/12/20Real Avg Weekly Earnings YoY4.10%4.40%
11/12/20Real Avg Hourly Earning YoY3.30%3.20%
11/12/20Initial Jobless Claims732k751k
11/12/20Continuing Claims6900k7285k
11/12/20Bloomberg Consumer Comfort47.5
11/12/20Monthly Budget Statement-$275.0b-$124.6b
11/13/20PPI Final Demand MoM0.20%0.40%
11/13/20PPI Ex Food and Energy MoM0.20%0.40%
11/13/20PPI Ex Food, Energy, Trade MoM0.20%0.40%
11/13/20PPI Final Demand YoY0.40%0.40%
11/13/20PPI Ex Food and Energy YoY1.20%1.20%
11/13/20PPI Ex Food, Energy, Trade YoY0.90%0.70%
11/13/20U. of Mich. Sentiment8281.8
11/13/20U. of Mich. Current Conditions9085.9
11/13/20U. of Mich. Expectations78.279.2
11/13/20U. of Mich. 1 Yr Inflation2.60%
11/13/20U. of Mich. 5-10 Yr Inflation2.40%
11/13/20Bloomberg Nov. United States Economic Survey


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