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Weekly Macro Updates

Initial Jobless Claims (Mar 14) 220k est., 281k actual, 211k prior
Continuing Claims (Mar 7) 1738k est., 1701k actual, 1699k prior
NAHB Housing Market Index (Feb) 73 est., 72 actual, 74 prior
Leading Index (Feb) 0.1% est., 0.1% actual, 0.7% prior: R-
Existing Home Sales MoM (Feb) 0.9% est., 6.5% actual, -2.0% prior
Chicago Federal Reserve National Activity Index (Feb) -0.35 est., 0.36 actual -0.33 prior: R-
Philadelphia Federal Reserve Business Outlook (Feb) 8.0 est., -12.7 actual, 36.7 prior
JOLTS Job Openings (Jan) 6400 est., 6963 actual, 6552 prior: R+
Manufacturing Production (Feb) 0.2% best., 0.1% actual, -0.2% prior: R-
Industrial Production (Feb) 0.4% est., 0.6% actual, -0.5% prior: R-
Retail Sales Ex Autos & Gas MoM (Feb) 0.3% est., -0.2% actual, 0.7% prior: R+
Retail Sales Control Group (Feb) 0.4% est., 0.0% actual, 0.4% prior: R+
Retail Sales Advance MoM (Feb) 0.2% est., -0.5% actual, 0.6% prior: R+
Capacity Utilization (Feb) 77.1 est., 77.0 actual, 76.6 prior 
 

 Strong or Improving
 Inconclusive or lacking trend
 Weak or declining
R+ Revised up
R- Revised down

Directional change based on general
long-term tends.
Capital Market Implications

As most economic releases are reported with a lag, they are backward not forward looking.  Therefore, most of last week’s economic releases reflected the state of the economy prior to the current lockdown.  As such, these releases were on average positive and suggestive of a relatively healthy economy prior to the pandemic.  On the other hand, weekly unemployment claims are a concurrent indicator and the level of last week’s claims demonstrated the velocity and magnitude of the current economic contraction.  Weekly claims spiked to 281,000 from the previous week’s level of 211,000, a 33% increase.  Currently, projections for the ultimate spike in claims range from 500,000 to more than 2 million.

With states locking down in an attempt to limit the spread of COVID-19, market participants decided to dump stocks again last week.  When trading ended Friday, stocks were off more than at anytime since 2008.  For the week, the S&P 500 Index plummeted -15% while the Dow Jones Industrial Average plunged -17.3% All sectors of the market were hit, with energy and real estate suffering the most, down nearly -20%. International markets were not punished as much however, as developed foreign markets sank -5.8% and emerging markets fell -9.8%.  Prices for bonds, other than Treasuries, plunged as spreads on corporate, municipal and high yield bonds surged.  For the week overall, the Barclay’s US Aggregate bond index fell -2.3%, US corporate bonds declined -8.9% and 10-year municipal bonds slumped -6.9% High yield bonds were down the most, off -10.2% for the week.