Clarksville, TN – The economic data remained consistent with a lackluster to moderate pace of growth in the near term. Building permits and housing starts disappointed in March, reflecting a pullback in multi-family activity (which appears to have been unsustainably strong in 2015).
Single-family permits, the key figure in the report, fell 1.2%, but the first quarter total was 15.2% higher than in 1Q15. Existing home sales rebounded from a soft February (likely reflecting weather effects in the Northeast and Midwest). The Index of Leading Economic Indicators rose 0.2%, following three consecutive monthly declines.While the economic calendar was light, the earnings calendar was heavy and reports were generally disappointing. Bond yields crept higher.
Next week, the economic calendar picks up. The focus is expected to be on the FOMC meeting and the advance GDP estimate. The Fed is widely expected to leave monetary policy unchanged.
There won’t be any revised economic projections or a Yellen press conference. So the only thing left is for investors to sift through the wording of the policy statement. GDP growth is expected to have been relatively soft in the first quarter, but we won’t have a complete picture in the advance estimate.
The headline growth figure will be revised in late May (2nd estimate), late June (3rd estimate), and late July (when annual benchmark revisions are due). Consumer spending is expected to have slowed (still positive), while business fixed investment should trend a bit lower.
Foreign trade and slower inventory growth should reduce the headline figure. Financial market participants often put too much weight on the GDP figure. The outlook for the second quarter and beyond should be more important (that data will start to arrive in the following week).
|Last||Last Week||YTD return %|
Consumer Money Rates
|Last||1 year ago|
|Last||1 year ago|
|Dollars per British Pound||1.432||1.504|
|Dollars per Euro||1.129||1.073|
|Japanese Yen per Dollar||109.46||119.91|
|Canadian Dollars per Dollar||1.267||1.223|
|Mexican Peso per Dollar||17.470||15.444|
|Last||1 year ago|
|Last||1 month ago|
|10-year municipal (TEY)||2.57||2.80|
Treasury Yield Curve – 04/22/2016
As of close of business 04/21/2016
|Apr 25||—||New Home Sales (March)|
|Apr 26||—||Durable Goods Orders (March)
Consumer Confidence (April)
|Apr 27||—||Advance Trade in Goods (March)
Pending Home Sales Index (March)
FOMC Policy Decision (no Yellen press conference)
|Apr 28||—||Jobless Claims (week ending April 23)
Real GDP (1Q16, advance estimate)
|Apr 29||—||Personal Income and Spending (March)
Employment Cost Index (1Q16)
Chicago Purchasing Managers (April)
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Commodities trading is generally considered speculative because of the significant potential for investment loss. Markets for commodities are likely to be volatile and there may be sharp price fluctuations even during periods when prices overall are rising. Specific sector investing can be subject to different and greater risks than more diversified investments.
Tax Equiv Muni yields (TEY) assume a 35% tax rate on triple-A rated, tax-exempt insured revenue bonds.
The information contained herein has been obtained from sources considered reliable, but we do not guarantee that the foregoing material is accurate or complete. Data source: Bloomberg, as of close of business April 21st, 2016.