The Treasury curve is bull flattening in the wake of yesterday’s mid-term elections, with the 2-year/10-year spread 4 bps lower on the day. Asian equity markets were mixed overnight, and European markets are up more than 1% (Euro Stoxx +1.2%). S&P 500 futures are up 16 points (+0.6%). The results of yesterday’s elections were largely as expected. Democrats were able to gain control of the House, and Republicans added to their Senate majority by two seats. Corporate profit margin headwinds continue to make headlines. The Wall Street Journal has three separate articles discussing various companies with labor shortages, surging transportation costs, and supply crunches in certain commodities (copper and aluminum). This could be a major theme in 2019 as it relates to inflation, Fed policy, and corporate earnings.

Jason Haley
Managing Director, Investment Management Group


11/05Markit US Services PMI54.654.854.7
11/05Markit US Composite PMI54.954.8
11/05ISM Non-Manufacturing Index5960.361.6
11/06JOLTS Job Openings708570097136
11/07MBA Mortgage Applications-4.00%-2.50%
11/07Consumer Credit$15.000b$20.078b
11/08Initial Jobless Claims213k214k
11/08Continuing Claims1634k1631k
11/08Bloomberg Consumer Comfort60.3
11/08FOMC Rate Decision (Upper Bound)2.25%2.25%
11/08FOMC Rate Decision (Lower Bound)2.00%2.00%
11/08Interest Rate on Excess Reserves2.20%2.20%
11/08Mortgage Delinquencies4.36%
11/08MBA Mortgage Foreclosures1.05%
11/09PPI Final Demand MoM0.20%0.20%
11/09PPI Ex Food and Energy MoM0.20%0.20%
11/09PPI Ex Food, Energy, Trade MoM0.20%0.40%
11/09PPI Final Demand YoY2.50%2.60%
11/09PPI Ex Food and Energy YoY2.30%2.50%
11/09PPI Ex Food, Energy, Trade YoY2.90%
11/09Wholesale Inventories MoM0.30%0.30%
11/09Wholesale Trade Sales MoM0.40%0.80%
11/09U. of Mich. Sentiment9898.6
11/09U. of Mich. Expectations87.289.3
11/09U. of Mich. Current Conditions114.9113.1
11/09U. of Mich. 1 Yr Inflation2.90%
11/09U. of Mich. 5-10 Yr Inflation2.40%