Week in Review 8.16.19
Week in Review
Week Ending: Friday, August 16, 2019
Recap & Commentary
In response to the new round of weak data, investors further crowded into U.S. Treasury bonds, which resulted in an inversion of the yield curve, wherein the yield on the 10-Year Treasury fell below that of the 2-Year Treasury, for the first time since 2007. Often considered a harbinger of recession, the brief inversion- it lasted less than a day- further inflamed current recessionary fears.
As various central banks have moved to cut rates in response to slowing growth, by some measures the total value of global bonds with a negative yield now stands at ~$16T.
Economic Bullet Points
Industrial Production slowed 0.2% in July although the prior month’s reading got a 0.2% upward revision. Overall, manufacturing and mining industry data remains in a trend decline thus far in 2019.
Housing Starts fell 4% in July to a 1.2 million-unit pace. While starts have fallen three straight months, most of the drop has been in multifamily units.
Small Business Sentiment, according to NFIB Small Business Optimism data, rose in July, indicating that owners are navigating trade uncertainty well.
Market Indices Week Ending 8/16
|U.S. Bond Market||1.0%|
|10-Year Treas. Yield||1.55%|
|WTI Oil ($/bl)||$55|
The Week Ahead
- Leading Indicators
- Existing Home Sales
- New Home Sales
- Jobless Claims