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

Subscribe Today!

Subscribe to our email list and get the latest articles and announcements from ALM First.

ALM First offers investment advisory services through ALM First Financial Advisors, LLC, which is registered with the U.S. Securities and Exchange Commission (“SEC”). SEC registration does not constitute an endorsement of the firm by the SEC nor does it indicate that the firm has attained a particular level of skill or ability. The information contained herein does not constitute investment advice or a recommendation for you to purchase or sell any specific security. You are solely responsible for reviewing the content and for any actions you take or choose not to take based on your review of such content. Information contained herein was derived from third party sources as indicated. While such information is believed to be reliable, no representation or warranty is made concerning the accuracy of any information presented. We have not and will not independently verify this information. Where such sources include opinions and projections, such opinions and projections should be ascribed only to the applicable third party source and not to ALM First. Statements herein that reflect projections or expectations of future financial or economic performance are forward-looking statements. Such “forward-looking” statements are based on various assumptions, which assumptions may not prove to be correct. Accordingly, there can be no assurance that such assumptions and statements will accurately predict future events or actual performance. No representation or warranty can be given that the estimates, opinions or assumptions made herein will prove to be accurate. Any projections and forward-looking statements included herein should be considered speculative and are qualified in their entirety by the information and risks disclosed in the confidential offering document. Actual results for any period may or may not approximate such forward-looking statements. No representations or warranties whatsoever are made by ALM First Financial Advisors, LLC or any other person or entity as to the future profitability of investments recommended by ALM First Financial Advisors, LLC.