November 27, 2020 Headlines

Treasury prices are drifting higher on expectedly light trading volume. The bond market will close early at 2pm Eastern Time.  The minutes of the November 5 FOMC meeting were released Wednesday afternoon, and market participants were mostly focused on the asset purchase discussion. Extending the duration of Treasury purchases was one topic discussed, and this is a likely next step if the Fed felt the need to increase its presence amid the Covid second wave. The committee also discussed enhanced guidance regarding the catalysts for any changes to its asset purchase program. This excerpt captured the crux of this topic:

“While participants judged that immediate adjustments to the pace and composition of asset purchases were not necessary, they recognized that circumstances could shift to warrant such adjustments. Accordingly, participants saw the ongoing careful consideration of potential next steps for enhancing the Committee’s guidance for its asset purchases as appropriate.”

It would appear that the Fed has learned its lesson from the “taper tantrum” of 2013, when some Fed leaders somewhat casually discussed tapering the pace of purchases and sparked a significant reaction in the bond market, including a 100 basis point steepening of the yield curve. Having more clear guidance as to what would constitute a reduction in asset purchases should foster more smooth market functionality.

Jason Haley
Chief Investment Officer

Date Time Event Survey Actual Prior Revised
11/23/2020 Chicago Fed Nat Activity Index 0.27 0.83 0.27 0.32
11/23/2020 Markit US Manufacturing PMI 53 56.7 53.4 —
11/23/2020 Markit US Services PMI 55 57.7 56.9 —
11/23/2020 Markit US Composite PMI — 57.9 56.3 —
11/24/2020 FHFA House Price Index MoM 0.80% 1.70% 1.50% —
11/24/2020 House Price Purchase Index QoQ — 3.10% 0.80% 1.00%
11/24/2020 S&P CoreLogic CS 20-City MoM SA 0.70% 1.27% 0.47% 1.35%
11/24/2020 S&P CoreLogic CS 20-City YoY NSA 5.30% 6.57% 5.18% 5.33%
11/24/2020 S&P CoreLogic CS 20-City NSA Index — 232.53 229.35 229.68
11/24/2020 S&P CoreLogic CS US HPI YoY NSA — 6.96% 5.71% 5.81%
11/24/2020 S&P CoreLogic CS US HPI NSA Index — 226.8 223.97 224.2
11/24/2020 Conf. Board Consumer Confidence 98 96.1 100.9 101.4
11/24/2020 Conf. Board Present Situation — 105.9 104.6 106.2
11/24/2020 Conf. Board Expectations — 89.5 98.4 98.2
11/24/2020 Richmond Fed Manufact. Index 20 15 29 —
11/25/2020 MBA Mortgage Applications — 3.90% -0.30% —
11/25/2020 Initial Jobless Claims 730k 778k 742k 748k
11/25/2020 Continuing Claims 6000k 6071k 6372k 6370k
11/25/2020 Advance Goods Trade Balance -$80.4b -$80.3b -$79.4b —
11/25/2020 Wholesale Inventories MoM 0.40% 0.90% 0.40% 0.70%
11/25/2020 Retail Inventories MoM 0.60% 0.80% 1.60% 1.70%
11/25/2020 GDP Annualized QoQ 33.10% 33.10% 33.10% —
11/25/2020 Personal Consumption 40.90% 40.60% 40.70% —
11/25/2020 GDP Price Index 3.60% 3.60% 3.60% —
11/25/2020 Core PCE QoQ 3.50% 3.50% 3.50% —
11/25/2020 Durable Goods Orders 0.80% 1.30% 1.90% 2.10%
11/25/2020 Durables Ex Transportation 0.50% 1.30% 0.90% 1.50%
11/25/2020 Cap Goods Orders Nondef Ex Air 0.50% 0.70% 1.00% 1.90%
11/25/2020 Cap Goods Ship Nondef Ex Air 0.40% 2.30% 0.50% 0.70%
11/25/2020 Bloomberg Consumer Comfort — 49.6 49.8 —
11/25/2020 Personal Income -0.10% -0.70% 0.90% 0.70%
11/25/2020 Personal Spending 0.40% 0.50% 1.40% 1.20%
11/25/2020 Real Personal Spending 0.30% 0.50% 1.20% 1.10%
11/25/2020 PCE Deflator MoM 0.00% 0.00% 0.20% —
11/25/2020 PCE Deflator YoY 1.20% 1.20% 1.40% —
11/25/2020 PCE Core Deflator MoM 0.00% 0.00% 0.20% —
11/25/2020 PCE Core Deflator YoY 1.40% 1.40% 1.50% 1.60%
11/25/2020 U. of Mich. Sentiment 77 76.9 77 —
11/25/2020 U. of Mich. Current Conditions 86 87 85.8 —
11/25/2020 U. of Mich. Expectations 71.9 70.5 71.3 —
11/25/2020 U. of Mich. 1 Yr Inflation — 2.80% 2.80% —
11/25/2020 U. of Mich. 5-10 Yr Inflation — 2.50% 2.60% —
11/25/2020 New Home Sales 975k 999k 959k 1002k
11/25/2020 New Home Sales MoM 1.70% -0.30% -3.50% 0.10%
11/25/2020 FOMC Meeting Minutes — — — —

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