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September 28, 2018

No Surprises Within Inflation Data


Inflation Holds Steady at Fed Target

The Commerce Department’s report on personal income and consumer spending for August headlined today’s economic data releases.  Detailed in the report, consumer spending rose a steady 0.3% (matching expectations), as declines in automobile purchases were more than offset by healthcare outlays.  Separately, personal income climbed 0.3% for a second consecutive month, slightly below median forecasts of +0.4%.  Consumer price data within the report fell mostly in line with comments from Fed Chair Jerome Powell, who after...

September 27, 2018

Stocks Rebound, Dollar Rises as Markets Digest Fed Decision


Risk Assets Regain Steam

The risk-off sentiment that followed yesterday’s Fed announcement proved to be short-lived, as today equity markets regained their footing and Treasury yields drifted higher.  Major stock indices finished with gains of 0.21%-0.65%, led by strength in the tech sector.  US Treasurys maintained a modest selloff throughout the trading session, and yields/swap rates closed 1-2bps higher across the curve.  Tomorrow’s release of the PCE price index (Fed’s preferred measure of inflation) will be closely watched by financial markets,...

September 26, 2018

Fed Hikes as Expected, Updates Forward Guidance


Fed Hikes Rates, Expands Outlook

The much anticipated FOMC meeting concluded this afternoon, the highlights of which include:

Rate Hike of 0.25%: As expected, the FOMC voted unanimously to raise its benchmark borrowing rate by a quarter point, bringing the target range to 2.00%-2.25%, the highest it has been in the past decade.


September 25, 2018

Yields Continue to Rise Ahead of Fed Decision


Trump Reinforces “America First”

This morning President Trump utilized his annual speech to the United Nations General Assembly to reiterate his “America First” plan of action to the other global leaders in attendance.  Highlights of his comments included:

  • Trump administration has “accomplished more than almost any administration in the history of our country”

    • The statement was met with laughter from the audience

  • “I have great respect and affection for my friend, President Xi, but I...

September 24, 2018

Tariffs with China Build While Stocks Slip, Yields Rise


Oil Surges After OPEC Meeting

Crude oil futures jumped to their highest level in the past four years after members of OPEC and other major oil-producing states reported their intention to maintain the current path of production despite an expected tightening in global supply.  The formal gathering took place in Algeria yesterday to discuss the anticipated impact of geopolitical factors such as the Iranian sanctions and the appropriate course of action from the group to balance the oil market.  Commodity analysts have projected a 1.5 to 2 billion barrel-per-...

September 21, 2018

Stocks Mixed, Treasurys Flat with Fed Meeting Approaching


Stocks Mixed to Finish Strong Week

Equity trading volumes surged during today’s session as investors juggled the expiration of stock options and futures (third Friday of September) with the reshuffling of their investments in the various sectors within the S&P 500.  Among major indices, the DJIA managed to post a 0.32% gain while the Nasdaq (-0.51%) and S&P 500 (-0.04%) finished in the red, albeit all three indexes succeeded in reaching new record highs during the week.  US Treasurys were mostly flat on the day, with the yield on the 10-year note...

September 20, 2018

Equity Indices Hit Record Highs as Trade Fears Take Backseat


Stocks, Yields Up…Again

US stocks rallied again today, pushing the DJIA and S&P 500 to new record highs as equity investors continued to look past the ongoing trade disputes.  Major indices finished with gains between 0.78%-0.98%, driven largely by strength in the tech sector.  US Treasurys experienced a slight selloff throughout the trading session, with yields/swap rates up 1-2bps across the curve and the 2-year note yield adding to its highest level in the past decade, now at 2.80%.  WTI crude oil futures reversed a portion of yesterday’s rally,...

September 19, 2018

Risk Assets Continue to Rise Despite Geopolitical Uncertainty


Financial Markets Continue to Ignore Tariffs

US Treasurys held within a tight range throughout the trading session, as bond markets again paid no mind to yesterday’s trade war escalation between the US and China.  Yields/swap rates finished marginally higher, with the 10-year note yield rising just above 3.06% and the 2-year note yield closed at 2.79% holding at its highest mark since 2008.  The recent jump in yields has provided a boost to financial sector stocks, pushing the DJIA to its highest closing level since January (26,405).  The tech-heavy Nasdaq...

September 18, 2018

Tit-for-Tat Tariff Battle Continues


Trade War Escalation

Yesterday evening the Trump administration announced that it would officially be moving forward with imposing tariffs on an additional $200 billion worth of imports from China.  The tariffs will become active at the beginning of next week and will start at 10%, before increasing to 25% on January 1, 2019.  Helping to marginally ease the concern over the trade war’s impact, the administration did remove a number of items from the initial list of imports to be taxed, notably Apple watches, consumer electronics, and various child safety...

September 17, 2018

Risk Assets Decline as Tariff Uncertainty Builds


China Uncertainty Weighs on Markets

US equity markets traded lower on the day as investors continue to consider the impact of increased tariffs on Chinese imports (and in turn, increased tariffs on US imports to China).  The tech-heavy Nasdaq (-1.43%) posted its largest daily loss since July, while the S&P 500 (-0.56%) and DJIA (-0.35%) were able to marginally trim their losses.  In bond markets, US Treasurys held within a tight range throughout the day and were mostly able to weather the trade uncertainty.  Yields/swap rates finished 1-2bps lower for...


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