Week of March 11 - 15, 2019

Maureen Kelliher, CFA

Maureen Kelliher, CFA

March 13, 2019

Weekly Economic Review

Weekly Macro Updates

CPI YoY (Feb) 1.6% est., 1.5% actual, 1.6% prior
PPI Final Demand YoY (Feb) 1.9% est., 1.9% actual, 2.0% prior
Durable Goods Orders  (Jan P) -0.4% est., 0.4% actual, 1.3% prior: R+
Empire Manufacturing (Mar)​ 10.0 est., 3.7 actual, 8.8 prior
U. of Mich. Sentiment (Mar P) 95.6 est., 97.8 actual, 93.8 prior
U. of Mich. Expectations (Mar P) 88.1 est., 89.2 actual, 84.4 prior
U. of Mich. 1 Yr Inflation (Mar P) 2.4% actual, 2.6% prior
JOLTS Job Openings (Jan)​ JOLTS Job Openings (Jan)
Initial Jobless Claims (Mar 9) 225k est., 229k actual, 223k prior
Continuing Claims (Mar 2)  1763k est., 1776k actual, 1758k prior: R+
New Homes Sales (Jan) 622k est., 607k actual, 652k prior: R+
Retail Sales Advance MoM (Jan) 0.0% est., 0.2% actual, -1.6% prior: R-
Retail Sales Ex Auto MoM (Jan) 0.3% est., 0.9% actual, -2.1% prior: R-

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

Capital Market Implications

Last week’s economic releases were mixed, with both the CPI and PPI signaling slowing inflation. Recent wage growth has been offset by productivity gains, helping to dampen inflation. Strength in the U.S. economy continued to come from consumers, as unemployment remains historically low and growth in the number of job openings continues to expand. New home sales held steady in January while retail sales releases were mixed as January was better than expected but December’s numbers were revised down. Consumer sentiment and expectations releases continued their upward trajectory, although consumer inflation expectations remained relatively unhanged. Manufacturing and goods orders continued to reflect slowing global growth, particularly driven by softening demand in China.

Stocks resumed their upward climb last week with the S&P 500 Index gaining 3.0%. The Dow was up 1.6% while the Russell 2000 Index was up 2.0%. Growth outperformed value, with the Russell 1000 Growth Index up 3.2% while its value counterpart gained 2.6%. International markets gained, with developed and emerging markets up 2.8% and 2.7% respectively. All of the sectors of the equity market were up, with technology leading with a 5.0% gain. Year-to-date, technology stocks are leading the market, up 18%. Bonds also saw positive returns, with the aggregate up 0.2%. Corporate bonds were up 0.4% while municipal bonds were flat, gaining 0.1%. High yield bonds were the strongest performer for the week, with returns of 0.7%.

CPI: Source: Bloomberg