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 TimeEventSurveyActualPriorRevised
11/23/2020Chicago Fed Nat Activity Index0.270.830.270.32
11/23/2020Markit US Manufacturing PMI5356.753.4
11/23/2020Markit US Services PMI5557.756.9
11/23/2020Markit US Composite PMI57.956.3
11/24/2020FHFA House Price Index MoM0.80%1.70%1.50%
11/24/2020House Price Purchase Index QoQ3.10%0.80%1.00%
11/24/2020S&P CoreLogic CS 20-City MoM SA0.70%1.27%0.47%1.35%
11/24/2020S&P CoreLogic CS 20-City YoY NSA5.30%6.57%5.18%5.33%
11/24/2020S&P CoreLogic CS 20-City NSA Index232.53229.35229.68
11/24/2020S&P CoreLogic CS US HPI YoY NSA6.96%5.71%5.81%
11/24/2020S&P CoreLogic CS US HPI NSA Index226.8223.97224.2
11/24/2020Conf. Board Consumer Confidence9896.1100.9101.4
11/24/2020Conf. Board Present Situation105.9104.6106.2
11/24/2020Conf. Board Expectations89.598.498.2
11/24/2020Richmond Fed Manufact. Index201529
11/25/2020MBA Mortgage Applications3.90%-0.30%
11/25/2020Initial Jobless Claims730k778k742k748k
11/25/2020Continuing Claims6000k6071k6372k6370k
11/25/2020Advance Goods Trade Balance-$80.4b-$80.3b-$79.4b
11/25/2020Wholesale Inventories MoM0.40%0.90%0.40%0.70%
11/25/2020Retail Inventories MoM0.60%0.80%1.60%1.70%
11/25/2020GDP Annualized QoQ33.10%33.10%33.10%
11/25/2020Personal Consumption40.90%40.60%40.70%
11/25/2020GDP Price Index3.60%3.60%3.60%
11/25/2020Core PCE QoQ3.50%3.50%3.50%
11/25/2020Durable Goods Orders0.80%1.30%1.90%2.10%
11/25/2020Durables Ex Transportation0.50%1.30%0.90%1.50%
11/25/2020Cap Goods Orders Nondef Ex Air0.50%0.70%1.00%1.90%
11/25/2020Cap Goods Ship Nondef Ex Air0.40%2.30%0.50%0.70%
11/25/2020Bloomberg Consumer Comfort49.649.8
11/25/2020Personal Income-0.10%-0.70%0.90%0.70%
11/25/2020Personal Spending0.40%0.50%1.40%1.20%
11/25/2020Real Personal Spending0.30%0.50%1.20%1.10%
11/25/2020PCE Deflator MoM0.00%0.00%0.20%
11/25/2020PCE Deflator YoY1.20%1.20%1.40%
11/25/2020PCE Core Deflator MoM0.00%0.00%0.20%
11/25/2020PCE Core Deflator YoY1.40%1.40%1.50%1.60%
11/25/2020U. of Mich. Sentiment7776.977
11/25/2020U. of Mich. Current Conditions868785.8
11/25/2020U. of Mich. Expectations71.970.571.3
11/25/2020U. of Mich. 1 Yr Inflation2.80%2.80%
11/25/2020U. of Mich. 5-10 Yr Inflation2.50%2.60%
11/25/2020New Home Sales975k999k959k1002k
11/25/2020New Home Sales MoM1.70%-0.30%-3.50%0.10%
11/25/2020FOMC Meeting Minutes

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