Treasury prices are modestly lower today as stocks extend gains for the week. There’s still no major macro news driving performance today, but for risk markets, this week’s activity is more likely a rebound from oversold positions. A Wall Street Journal article today highlights a common theme from Q3 earnings reports – higher prices. After remaining stagnant for much of the last decade, companies are reporting higher cost pressures (wages, transportation, raw materials, tariffs, etc.), which should further fuel consumer inflation in the next year. Kellogg CEO Steve Cahillane said, “We think 2019 will be more inflationary than we have seen historically since the recession.” A strong consumer environment has contributed to the lowest unemployment rate in decades, which is now fueling upward wage pressures, and new tariffs on imported goods only adds to these price pressures. As such, Fed leaders are intent on continuing with policy tightening for the foreseeable future.

Jason Haley
Managing Director, Investment Management Group


10/29Personal Income0.40%0.20%0.30%
10/29Personal Spending0.40%0.40%0.30%
10/29Real Personal Spending0.30%0.30%0.20%
10/29PCE Deflator MoM0.10%0.10%0.10%
10/29PCE Deflator YoY2.00%2.00%2.20%
10/29PCE Core MoM0.10%0.20%0.00%
10/29PCE Core YoY2.00%2.00%2.00%
10/29Dallas Fed Manf. Activity28.129.428.1
10/30S&P CoreLogic CS 20-City MoM SA0.10%0.09%0.09%
10/30S&P CoreLogic CS 20-City YoY NSA5.80%5.49%5.92%
10/30S&P CoreLogic CS 20-City NSA Index213.72213.76
10/30S&P CoreLogic CS US HPI NSA Index205.81205.35
10/30S&P CoreLogic CS US HPI YoY NSA5.77%6.00%
10/30Conf. Board Consumer Confidence135.9137.9138.4
10/30Conf. Board Present Situation172.8173.1
10/30Conf. Board Expectations114.6115.3
10/31MBA Mortgage Applications-2.50%4.90%
10/31ADP Employment Change187k227k230k
10/31Employment Cost Index0.70%0.80%0.60%
10/31Chicago Purchasing Manager6058.460.4
11/01Challenger Job Cuts YoY153.60%70.90%
11/01Nonfarm Productivity2.10%2.20%2.90%
11/01Unit Labor Costs1.00%1.20%-1.00%
11/01Initial Jobless Claims212k214k215k
11/01Continuing Claims1640k1631k1636k
11/01Bloomberg Consumer Comfort60.1
11/01Markit US Manufacturing PMI55.855.9
11/01Construction Spending MoM0.00%0.10%
11/01ISM Manufacturing5959.8
11/01ISM Employment58.8
11/01ISM Prices Paid6966.9
11/01ISM New Orders61.8
11/01Wards Total Vehicle Sales17.05m17.40m
11/02Trade Balance-$53.6b-$53.2b
11/02Change in Nonfarm Payrolls200k134k
11/02Two-Month Payroll Net Revision
11/02Change in Private Payrolls195k121k
11/02Change in Manufact. Payrolls16k18k
11/02Unemployment Rate3.70%3.70%
11/02Underemployment Rate7.50%
11/02Average Hourly Earnings MoM0.20%0.30%
11/02Average Hourly Earnings YoY3.10%2.80%
11/02Average Weekly Hours All Employees34.534.5
11/02Labor Force Participation Rate62.70%62.70%
11/02Factory Orders0.50%2.30%
11/02Factory Orders Ex Trans0.10%
11/02Durable Goods Orders0.80%
11/02Durables Ex Transportation0.10%
11/02Cap Goods Orders Nondef Ex Air-0.10%
11/02Cap Goods Ship Nondef Ex Air0.00%