November 16, 2021 Headlines

Treasury yields have shifted higher following a strong retail sales report for October. The 5-year note yield is now at a fresh cycle high of 1.27%. Advance retail sales rose 1.7% in October (1.4% expected), and excluding autos, sales were also 1.7% m/m, well above the expected 1% growth rate according to Bloomberg. The retail sales control group, which is used in GDP calculations, rose 1.6%, nearly double expectations.

Markets continue to speculate on what the Fed might do in response to current inflation pressures. Fed funds futures and OIS markets are now pricing 2-3 rate hikes in 2022 and as much as 5 hikes by mid-2023, and some former Fed leaders are calling on the Fed to accelerate the pace of tapering just announced at the November FOMC meeting. We should have more clarity on future Fed leadership very soon. Senate Banking Committee Chairman Sherrod Brown said he was told by White House officials to expect an “imminent” announcement regarding President Biden’s choice for Fed chair.

Jason Haley
Chief Investment Officer

11/15/21Empire Manufacturing2230.919.8
11/16/21Retail Sales Advance MoM1.40%1.70%0.70%0.80%
11/16/21Retail Sales Ex Auto MoM1.00%1.70%0.80%0.70%
11/16/21Retail Sales Ex Auto and Gas0.70%1.40%0.70%0.50%
11/16/21Retail Sales Control Group0.90%1.60%0.80%0.50%
11/16/21Import Price Index MoM1.00%1.20%0.40%
11/16/21Import Price Index ex Petroleum MoM0.30%0.50%0.10%0.20%
11/16/21Import Price Index YoY10.30%10.70%9.20%9.30%
11/16/21Export Price Index MoM1.00%1.50%0.10%0.40%
11/16/21Export Price Index YoY16.30%18.00%16.30%16.50%
11/16/21Industrial Production MoM0.90%-1.30%
11/16/21Capacity Utilization75.90%75.20%
11/16/21Manufacturing (SIC) Production0.90%-0.70%
11/16/21Business Inventories0.60%0.60%
11/16/21NAHB Housing Market Index8080
11/16/21Total Net TIC Flows$91.0b
11/16/21Net Long-term TIC Flows$79.3b
11/17/21MBA Mortgage Applications5.50%
11/17/21Building Permits MoM2.80%-7.70%-7.80%
11/17/21Building Permits1630k1589k1586k
11/17/21Housing Starts1580k1555k
11/17/21Housing Starts MoM1.60%-1.60%
11/18/21Initial Jobless Claims260k267k
11/18/21Continuing Claims2120k2160k
11/18/21Philadelphia Fed Business Outlook2423.8
11/18/21Langer Consumer Comfort50.350.3
11/18/21Leading Index0.80%0.20%
11/18/21Kansas City Fed Manf. Activity2831


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