US equity futures pointed to a lower open this morning as fears that the global economy may be slowing down loomed again after official growth forecasts in the euro zone were slashed. The European Commission downgraded its forecasts that the growth will slow to 1.30% this year from 1.90% in 2018. Investors are struggling to find new catalysts to extend its recent rally in risk assets as many companies posted poor forecasts for the first quarter of 2019 even after reporting solid earnings growth for the fourth quarter. In corporate news, BB&T agreed to buy SunTrust for about $28 Billion as a merger of equals, creating the sixth largest US lender and making the largest bank merger in more than a decade. The combined company will operate under a new name. Yesterday, investors tuned into Fed Chairman Powell’s meeting with teachers but he did not specifically address the path of interest rates. Both treasuries and the dollar rose and WTI crude fell below $54 a barrel this morning.
Initial Jobless Claims fell to 234k from 253k in week prior vs. 221k consensus. The surge in claims last week can primarily attributed to the recent government shutdown and this week’s decline might be an indicator that claims are returning to normal. However, with another possible shutdown around the corner if lawmakers and President Trump fail to reach a deal by February 15th, uncertainty regarding future claims still exists. Continuing Claims also declined to 1736k from a downwardly revised prior of 1778k vs. 1733k consensus. Lastly, Bloomberg Consumer Comfort improved to 58.20 vs. 57.40 prior. The US Treasury is scheduled to auction off $19 Billion of 30-Yearbonds at 10:00 AM (PT) today.
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US equity futures pointed to a lower open this morning as fears that the global economy may be slowing down loomed again after official growth forecasts in the euro zone were slashed. The European Commission downgraded its forecasts that the growth will slow to 1.30% this year from 1.90% in 2018. Investors are struggling to find new catalysts to extend its recent rally in risk assets as many companies posted poor forecasts for the first quarter of 2019 even after reporting solid earnings growth for the fourth quarter. In corporate news, BB&T agreed to buy SunTrust for about $28 Billion as a merger of equals, creating the sixth largest US lender and making the largest bank merger in more than a decade. The combined company will operate under a new name. Yesterday, investors tuned into Fed Chairman Powell’s meeting with teachers but he did not specifically address the path of interest rates. Both treasuries and the dollar rose and WTI crude fell below $54 a barrel this morning.
Initial Jobless Claims fell to 234k from 253k in week prior vs. 221k consensus. The surge in claims last week can primarily attributed to the recent government shutdown and this week’s decline might be an indicator that claims are returning to normal. However, with another possible shutdown around the corner if lawmakers and President Trump fail to reach a deal by February 15th, uncertainty regarding future claims still exists. Continuing Claims also declined to 1736k from a downwardly revised prior of 1778k vs. 1733k consensus. Lastly, Bloomberg Consumer Comfort improved to 58.20 vs. 57.40 prior. The US Treasury is scheduled to auction off $19 Billion of 30-Year bonds at 10:00 AM (PT) today.
The curve has bull-flattened with UST 10-year yield down 3.38 bps.