FinSer 

 Financial Focus

November 15, 2019 

 

GOOD MORNING!    Data misses in Asia triggered the global recession birds and economic bears Thursday and the run was on any yield for safe haven sovereign debt, especially Treasuries.  A miss on the core (excluding food & energy) PPI and commodity prices (excluding precious metals which benefitted from hunt for safe havens) stalling, lowering market inflation expectations, supported the up-bid for Treasuries.  Stocks stayed underwater for most of the session, but bubbled up to the surface just before closing.  Fed speakers reiterated that they have hit the pause button on rates and for the time being will neither refill (although the Fed’s balance sheet is up $288 billion since September in the non-QE QE, attached) nor take away the punchbowl.    

     The markets are moving again on more noise about trade (haven’t we heard this story before, ‘Deja vu all over again.’-Yogi Berra).White House economic adviser Kudlow is reportedly to have said that a phase 1 trade deal with China, though not done yet is “coming down to the short strokes.”  European and Asian equities climbed along with US stock index futures on the hint of progress.  Treasury prices (the flip side of the coin to stocks and currency strength) are lower, although somewhat muted ahead of data.  But yields are very close to where they where 24 hours ago.  The number of talking Fedheads has declined while the number of economic releases has increased on the calendar for today.   The highlighted report will be October’s retail sales.  After unexpected weakness (subject to revision), the economists and analysts anticipate a rebound, but once smoothed out may still some eroding of momentum on the part of consumers, which account for about 70% of GDP.  Also being reported today and may also factor into trading direction are October’s import/export price indices, the New York Fed Empire State Manufacturing Index, last month’s industrial production/capacity utilization and September’s business inventories.        

                      

GENERAL
TODAY             
PREVIOUS        
FED FUNDS
1.50% to 1.75% 1.50% to 1.75
1 MONTH LIBOR
1.76538% 1.76163%
S & P 500
3096.63 3094.04
GOLD
1465.60 1469.40
YEN
108.69 108.60
EURO
1.1031 1.0995
WEST TEXAS CRUDE
56.77 57.12
T-BILLS
YIELD                
YIELD                 
3 MONTH
1.55 1.55
6 MONTH
1.57 1.56
1 YEAR
1.53 1.54
T-NOTES / BONDS
YIELD                 
YIELD                  
2 YEAR
1.61 1.61
3 YEAR
1.61
1.61
5 YEAR
1.65 1.65
10 YEAR
1.83 1.83
30 YEAR
2.31 2.31

Data Source: Bloomberg Financial Markets
11152019