Risk markets rebounded overnight, sending Treasury prices lower across the curve. While there were no major macro headlines boosting sentiment, U.S. earnings reports were generally positive late yesterday. Asian equity markets were sharply lower in a follow through to yesterday’s rough session for U.S. stocks (S&P 500 -3.1%, NASDAQ -4.4%), but European markets and U.S. futures are both higher at the moment on the earnings news. Today’s European Central Bank (ECB) meeting was largely in line with expectations. ECB President Mario Draghi acknowledged weaker than expected data over the last several months but reiterated that risks to growth going forward are “broadly balanced.” The ECB statement maintained its expectations to end asset purchases in December, and the central bank is still not expected to initiate the first rate hike until after summer 2019, at the earliest.
Headline durable goods orders were better than expected in September, but the component of the report that is used as a proxy for future business investment was negative for the second consecutive month. Nondefense capital goods orders excluding aircraft fell 0.1% from the prior month versus expectations of a 0.5% gain. Business investment has been stronger this year in the wake of tax reform, but some are suggesting the recent weakness in this measure of capital expenditures is related to global trade concerns. It’s a little too early to assess a trend change, but it’s certainly worth watching.
Jason Haley
Managing Director, Investment Management Group
| Date | Event | Survey | Actual | Prior |
| 10/22 | Chicago Fed Nat Activity Index | 0.21 | 0.17 | 0.18 |
| 10/23 | Richmond Fed Manufact. Index | 24 | 15 | 29 |
| 10/24 | MBA Mortgage Applications | — | 4.90% | -7.10% |
| 10/24 | FHFA House Price Index MoM | 0.30% | 0.30% | 0.20% |
| 10/24 | Markit US Manufacturing PMI | 55.3 | 55.9 | 55.6 |
| 10/24 | Markit US Services PMI | 54 | 54.7 | 53.5 |
| 10/24 | Markit US Composite PMI | — | 54.8 | 53.9 |
| 10/24 | New Home Sales | 625k | 553k | 629k |
| 10/24 | New Home Sales MoM | -0.60% | -5.50% | 3.50% |
| 10/24 | U.S. Federal Reserve Releases Beige Book | |||
| 10/25 | Advance Goods Trade Balance | -$75.1b | -$76.0b | -$75.8b |
| 10/25 | Wholesale Inventories MoM | 0.50% | 0.30% | 1.00% |
| 10/25 | Retail Inventories MoM | — | 0.10% | 0.70% |
| 10/25 | Durable Goods Orders | -1.50% | 0.80% | 4.40% |
| 10/25 | Durables Ex Transportation | 0.40% | 0.10% | 0.00% |
| 10/25 | Cap Goods Orders Nondef Ex Air | 0.50% | -0.10% | -0.90% |
| 10/25 | Cap Goods Ship Nondef Ex Air | 0.40% | 0.00% | -0.20% |
| 10/25 | Initial Jobless Claims | 215k | 215k | 210k |
| 10/25 | Continuing Claims | 1644k | 1636k | 1640k |
| 10/25 | Bloomberg Consumer Comfort | — | — | 60.8 |
| 10/25 | Pending Home Sales MoM | 0.00% | — | -1.80% |
| 10/25 | Pending Home Sales NSA YoY | -2.60% | — | -2.50% |
| 10/25 | Kansas City Fed Manf. Activity | 14 | — | 13 |
| 10/26 | GDP Annualized QoQ | 3.30% | — | 4.20% |
| 10/26 | Personal Consumption | 3.30% | — | 3.80% |
| 10/26 | GDP Price Index | 2.10% | — | 3.00% |
| 10/26 | Core PCE QoQ | 1.80% | — | 2.10% |
| 10/26 | U. of Mich. Sentiment | 99 | — | 99 |
| 10/26 | U. of Mich. Current Conditions | — | — | 114.4 |
| 10/26 | U. of Mich. Expectations | — | — | 89.1 |
| 10/26 | U. of Mich. 1 Yr Inflation | — | — | 2.80% |
| 10/26 | U. of Mich. 5-10 Yr Inflation | — | — | 2.30% |