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Market Commentary


 
Today's Coupons
 
  10-Year Notes   99-11 (-03.5)  
 
  FN 3.5% Coupon   102-13 (+00.5)  
 
  Support   3.237%  
 
  Resistance   1.457%  
 
 
 
 
Friday, September 27, 2019
 
 
Treasury Yields Decline - US GDP Growth Decelerating
 
 
Market opened today’s session with treasuries rallying across all maturities. 10-Year Treasury yield is at 1.6853, 0.68 bps decreased from prior closing of 1.6921.

The Dow Jones rose 100 points this morning, led higher by a gain in UnitedHealth and JP Morgan Chase. Futures on the S&P 500 climbed 0.20% due to strength in financials and industrial stocks, while the Nasdaq Composite remained flat. Wells Fargo announced that it named Bank of New York Mellon Chairman and CEO Charles Scharf as its new CEO, representing the bank’s first permanent CEO since Tim Sloan resigned in March. Following the announcement, Wells Fargo’s stock rose more than 4.00%. Trade talks between the US and China have been scheduled to resume October 10th - October 11th in Washington, DC. The US Treasury will auction $45 billion in three-month bills, and $42 billion in six-month bills on Monday, September 30th. Oil fell after a report that Saudi Arabia had moved to impose a partial cease-fire in Yemen; West Texas Intermediate crude oil declined 2.00% to $55.30 a barrel. The yield on 10-Year Treasuries rose two basis points to 1.72%. Boeing CEO, Dennis Muilenburg, is set to testify before House lawmakers on October 30th regarding the two fatal crashes of the company’s best selling plane, the 737 Max. Boeing and the Federal Aviation Administration are facing several investigations over the development and approval of the 737 Max, which have been grounded since mid-March after two crashes within five months of one another.

Manufacturing, which accounts for about 11.00% of the economy, took a big hit as orders for non-defense aircraft and parts dropped 17.10% due to demand and design problems associated with Boeing. Boeing reported on its website that it had received only six aircraft orders in August after receiving 31 the month before. US consumer spending slowed more than expected in August, showing it’s softest read since February and suggesting that a critical contributor of US GDP growth is decelerating. Consumer spending accounts for more than 66.00% of total economic output in the US. New orders for US-made capital goods fell unexpectedly in August and shipments rebounded moderately, revealing a continued weakness in business investment after it declined at its steepest pace in 3.5 years in the second quarter. Federal Reserve Chair Jerome Powell said US central bank contacts had told policymakers that trade policy uncertainty “has discouraged them from investing in their businesses”. Business investment declined at a 1.00% annualized rate last quarter, the biggest drop since 2015’s fourth quarter.

The curve has bull-steepened with UST 10-Year yield down 0.68 bps.
 
 
   
 
   
 
This Week's Events
 
 
  DATE EVENT TIME(PT) PERIOD SURVEY ACTUAL PRIOR REVISED  
  09/23 Chicago Fed Nat Activity Index 05:30 Aug -0.03 0.10 -0.36 -0.41  
                   
  09/23 Markit US Manufacturing PMI 06:45 Sep P 50.40 51.00 50.30 -  
                   
  09/23 Markit US Services PMI 06:45 Sep P 51.40 50.90 50.70 -  
                   
  09/23 Markit US Composite PMI 06:45 Sep P - 51.00 50.70 -  
                   
  09/24 FHFA House Price Index MoM 06:00 Jul 0.30% 0.40% 0.20% -  
                   
  09/24 S&P CoreLogic CS 20-City MoM SA 06:00 Jul 0.10% 0.02% 0.04% 0.06%  
                   
  09/24 S&P CoreLogic CS 20-City YoY NSA 06:00 Jul 2.10% 2.00% 2.13% 2.16%  
                   
  09/24 Richmond Fed Manufact. Index 07:00 Sep 1.00 -9.00 1.00 -  
                   
  09/25 MBA Mortgage Applications 04:00 20 Sep - -10.10% -0.10% -  
                   
  09/25 New Home Sales 07:00 Aug 659k 713k 635k 666k  
                   
  09/25 New Home Sales MoM 07:00 Aug 3.80% 7.10% -12.80% -8.60%  
                   
  09/26 GDP Annualized QoQ 05:30 2Q T 2.00% 2.00% 2.00% -  
                   
  09/26 Personal Consumption 05:30 2Q T 4.70% 4.60% 4.70% -  
                   
  09/26 GDP Price Index 05:30 2Q T 2.40% 2.40% 2.40% -  
                   
  09/26 Core PCE QoQ 05:30 2Q T 1.70% 1.90% 1.70% -  
                   
  09/26 Wholesale Inventories MoM 05:30 Aug P 0.10% 0.40% 0.20% 0.10%  
                   
  09/26 Initial Jobless Claims 05:30 21 Sep 212k 213k 208k 210k  
                   
  09/26 Continuing Claims 05:30 14 Sep 1666k 1650k 1661k 1665k  
                   
  09/26 Bloomberg Consumer Comfort 06:45 22 Sep - 61.70 62.70 -  
                   
  09/26 Pending Home Sales MoM 07:00 Aug 1.00% 1.60% -2.50% -  
                   
  09/26 Pending Home Sales NSA YoY 07:00 Aug 1.30% 1.10% 1.70% -  
                   
  09/27 Personal Income 05:30 Aug 0.40% 0.40% 0.10% -  
                   
  09/27 Durable Goods Orders 05:30 Aug P -1.10% 0.20% 2.00% -  
                   
  09/27 Personal Spending 05:30 Aug 0.30% 0.10% 0.60% 0.50%  
                   
  09/27 Durables Ex Transportation 05:30 Aug P 0.20% 0.50% -0.40% -0.50%  
                   
  09/27 PCE Deflator MoM 05:30 Aug 0.10% 0.00% 0.20% -  
                   
  09/27 PCE Deflator YoY 05:30 Aug 1.40% 1.40% 1.40% -  
                   
  09/27 U. of Mich. Sentiment 07:00 Sep F 92.10 93.20 92.00 -
                   
 
 
 
 
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