February 19, 2020
Chief Economist Scott Brown discusses the latest market data.
Retail sales jumped 5.3% in January (+7.4% y/y), up 5.9% ex-autos (+6.1% y/y). Some of January’s strength reflected a smaller decline in the unadjusted figures (-17.3%, vs. -18.5% in January 2020) following a weak holiday shopping season. However, unadjusted figures were still substantially higher than a year ago, suggesting that improvement was likely fueled by the resumption of extended unemployment benefits. Industrial production rose 0.9% in January (-1.8% y/y). Manufacturing output rose 1.0% (-1.2% y/y). Single-family building permits rose 3.8% in January (+29.9% y/y and up 55% from two years ago)
The Producer Price Index jumped 1.3% in January (1.7% y/y), reflecting supply chain constraints and a rebound in prices that were restrained due to the pandemic. Ex-food and energy, the index for unprocessed intermediate goods rose 8.9% (24.9% y/y). Import prices rose 1.4% in January (0.9% y/y), up 0.8% (2.6% y/y) ex-food and fuels. Ex-fuels, prices of imported raw materials rose 4.3% (13.3% y/y), while the index for consumer goods ex-autos edged down 0.1% (0.1% y/y).
Next week, Fed Chair Powell is expected to cover no new ground in his prepared monetary policy testimony to Congress on Tuesday and Wednesday, but investors will tune into the Q&A for any comments about asset valuations and inflation. The second estimate of 4Q20 GDP growth is expected to be close to the advance figure. January personal income and spending data will reflect the increase in pandemic assistance, while the core PCE Price Index should be mild.
|Last||Last Week||YTD return %|
Consumer Money Rates
|Last||1 year ago|
|Last||1 year ago|
|Dollars per British Pound||1.3975||1.292|
|Dollars per Euro||1.2092||1.081|
|Japanese Yen per Dollar||105.69||111.37|
|Canadian Dollars per Dollar||1.268||1.322|
|Mexican Peso per Dollar||20.309||18.563|
|Last||1 year ago|
|Last||1 month ago|
|10-year municipal (TEY)||1.25||1.17|
Treasury Yield Curve – 02/19/2021
As of close of business 02/18/2021
S&P Sector Performance (YTD) – 02/19/2021As of close of business 02/18/2021
|Febrary 22||—||Leading Economic Indicators (January)|
|February 23||—||Powell Monetary Policy Testimony (Senate)|
|—||CB Consumer Confidence (February)|
|February 24||—||Powell Monetary Policy (House)|
|—||New Home Sales (January)|
|February 25||—||Jobless Claims (week ending 2/20)|
|—||Real GDP (4Q20, 2nd estimate)|
|—||Durable Goods Orders (January)|
|—||Pending Home Sales Index (January)|
|February 26||—||Personal Income and Spending (January)|
|—||Chicago Business Barometer (February)|
|—||UM Consumer Sentiment (February)|
|March 1||—||ISM Manufacturing Index (February)|
|March 5||—||Employment Report (February)|
|March 16||—||FOMC Policy Decision|
All expressions of opinion reflect the judgment of the Research Department of Raymond James & Associates, Inc. and are subject to change. There is no assurance any of the forecasts mentioned will occur or that any trends mentioned will continue in the future. Investing involves risks including the possible loss of capital. Past performance is not a guarantee of future results. International investing is subject to additional risks such as currency fluctuations, different financial accounting standards by country, and possible political and economic risks, which may be greater in emerging markets. While interest on municipal bonds is generally exempt from federal income tax, it may be subject to the federal alternative minimum tax, and state or local taxes. In addition, certain municipal bonds (such as Build America Bonds) are issued without a federal tax exemption, which subjects the related interest income to federal income tax. Municipal bonds may be subject to capital gains taxes if sold or redeemed at a profit. Taxable Equivalent Yield (TEY) assumes a 35% tax rate.
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