Saturday marked one year since the COVID national shut down.
If you were a Rip Van Winkle type, just waking up from a long slumber, looking at the market performance would give you absolutely no indication of what happened. The Dow made new all-time closing highs Wednesday, Thursday and Friday, settling about 500 points higher than the prior ATH.
US equities posted solid gains for the week, with all sectors finishing higher. Treasuries were mostly weaker again with the curve steepening notably. The 2/10 spread hit its widest mark since late 2015 and the 10Y closed above 1.6% to reach its highest point since before the pandemic. The dollar was weaker overall, dropping against the euro and sterling but firmer on the yen cross. Gold finished the week up 1.3%. Oil was slightly weaker, with WTI settling down 0.7%.
Global Bond Yields
Foreign Exchange Market
The Baker Hughes rig count lost 1 this week. There are 402 oil and gas rigs operating in the US – down 390 over last year.
- Brent Crude Oil declined 0.66% this week closing at $69.22/bbl
- WTI Crude Oil declined 0.73% this week to close at $65.61/bbl
- Heating Oil gained 1.21% this week closing at $1.97/gallon
- Natural Gas declined 3.74% this week closing at $2.60 per million BTUs
- Unleaded Gas gained 3.40% this week closing at $2.13/gallon
- Gold gained 1.25% this week closing at $1719.80/oz
- Silver gained 2.47% on the week closing at $25.91/oz
- Palladium gained 1.35% this week closing at $2359.40/oz
- Platinum gained 6.38% this week closing at $1200.30/oz
- Copper gained 1.58% this week closing at $4.14/lb
Weekly Unemployment Claims – Released Thursday 3/11/2021 – Initial jobless claims for the week ending March 6th decreased 42k to 712k. The 4-week moving average was 759k, a decrease of 34k.
Job Openings & Labor Turnover Survey JOLTS – Released 3/11/2021 – The U.S. Bureau of Labor Statistics reported the number and rate of job openings was little changed at 6.9 million on the last business day of January. Over the month, hires decreased to 5.3 million and separations increased to 5.3 million. Within separations, the quits rate was little changed at 2.3%. The layoffs and discharges rates was little changed at 1.2%.
February Jobs Report – BLS Summary – Released 3/5/2021 – The US Economy added 379k nonfarm jobs in February and the Unemployment rate was little changed at 6.2%. Average hourly earnings increased 7 cents to $30.01. Hiring highlights include +355k Leisure and Hospitality, +63k Professional and Business Services, +44k Education and Health Services, and -86k Government.
- Average hourly earnings increased 7 cents to $30.01.
- U3 unemployment rate was little changed at 6.2%. U6 unemployment rate was unchanged at 11.1%.
- The labor force participation rate was unchanged 61.4%.
- Average work week declined by 0.3 hour to 34.6 hours.
Employment Cost Index – Released 1/29/2021 – Compensation costs for civilian workers increased 0.7% for the 3-month period ending in December 2020. The 12 month period ending on December 2020 saw compensation costs increase by 2.5%. The 12 month period ending December 2019 increased 2.7%. Wages and salaries increased 2.6 percent over the year and increased 2.9 percent for the 12-month period ending in December 2019. Benefit costs increased 2.1 percent for the 12-month period ending in December 2020. In December 2019, benefit costs increased 1.9 percent. This report is published quarterly.
This Week’s Economic Data
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Producer Price Index – Released 3/12/2021 – The Producer Price Index for final demand increased 0.5% in February. PPI less food and energy increased 0.3% in February.
Consumer Price Index – Released 3/10/2021 – The Consumer Price Index increased 0.4% in February. Core CPI, which excludes food and energy was up 0.1%. The monthly changes left total CPI up 1.7% year-over-year and core CPI up 1.3%.
Recent Economic Data
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Consumer Credit – Released 3/5/2021 – In January, consumer credit increased at a seasonally adjusted rate of 0.4%. Revolving credit decreased at an annual rate of 12.2%, while nonrevolving credit increased at an annual rate of 3.2%. Total Outstanding consumer credit is currently at $4.1768 trillion.
U.S. Trade Balance – Released 3/5/2021 – According to the U.S. Census Bureau of Economic Analysis the goods and services deficit increased in January by $1.2 billion to $68.2 billion. January exports were $191.9 billion, $1.8 billion more than December exports. January imports were $260.2 billion, $3.1 billion more than December imports. Year over year the goods and services deficit increased $23.8 billion or 53.7%. Year – over – year exports and imports decreased $15.7 billion or 7.6% and increased $8.1 billion or 3.2% respectively.
US Light Vehicle Sales – Released 3/5/2021 – U.S. light vehicle sales were at a seasonally adjusted annual rate (SAAR) of 15.671 million units in February.
PMI Non-Manufacturing Index – Released 3/3/2021 – Economic activity in the non-manufacturing sector grew in February for the ninth consecutive month. ISM Non-Manufacturing registered 55.3 percent, which is 3.4 percentage points below the adjusted January reading of 58.7 percent.
PMI Manufacturing Index – Released 3/1/2021 – February PMI increased 2.1% to 60.8% from January’s reading of 58.7%. The New Orders Index was up 3.7% from January’s reading of 61.1% to 64.8%. The Production Index registered 63.2%, up 2.5%.
U.S. Construction Spending – Released 3/1/2021 – Construction spending increased 1.7% in January measuring at a seasonally adjusted annual rate of $1,521.5 billion. The January figure is 5.8% above the January 2019 estimate. Private construction spending was 1.7% above the revised December estimate at $1,160.0 billion. Public construction spending was 1.7% above the revised December estimate at $361.5 billion.
Chicago PMI – Released 2/26/2021 – Chicago PMI declined to 59.5 points in February. This marks eight consecutive months above the 50-mark following a full year under it. Among the main five indicators, New Orders saw the largest monthly decline, followed by Production. Employment recorded the biggest gain.
Personal Income – Released 2/26/2021 – Personal income increased $1,954.7 billion or 10.0 percent in January according to estimates released today by the Bureau of Economic Analysis. Disposable personal income (DPI) increased $1,963.2 billion or 11.4 percent and personal consumption expenditures (PCE) increased $340.9 billion or 2.4 percent.
Second Estimate of 4th Quarter 2020 GDP – Released 2/25/2021 – Real gross domestic product (GDP) increased at an annual rate of 4.1 percent in the fourth quarter of 2020, according to the second estimate released by the Bureau of Economic Analysis. The third quarter of 2020 saw an increase of 33.4 percent in real GDP. The second GDP estimate is based on more complete source data than that of the advance estimate. The advance estimate saw GDP increase 4.0 percent. The increase in real GDP reflected increases in exports, nonresidential fixed investment, personal consumption expenditures (PCE), residential fixed investment, and private inventory investment that were partly offset by decreases in state and local government spending and federal government spending. Imports, which are a subtraction in the calculation of GDP, increased. With the second estimate, upward revisions to residential fixed investment, private inventory investment, and state and local government spending were partly offset by a downward revision to personal consumption expenditures (PCE).
Durable Goods – Released 2/25/2021 – New orders for manufactured durable goods in January increased for the ninth consecutive month up $8.5 billion or 3.4% to $256.6 billion. Transportation equipment led the increase rising $6.1 billion or 7.8% to $85.1 billion.
New Residential Sales – Released 2/24/2021 – Sales of new single-family homes increased 4.3% to 923k, seasonally adjusted, in January. The median sales price of new homes sold in January was $346,400 with an average sales price of $408,800. At the end of January the seasonally adjusted estimate of new homes for sale was 307k. This represents a supply of 4.0 months at the current sales rate.
Consumer Confidence – Released 2/23/2021 – The Consumer confidence index increased 2.70% in February following an increase in January. The Index now shows a reading of 91.3, up from 88.9 in January.
Existing Home Sales – Released 2/19/2021 – Existing home sales increased in January following an increase in December. Sales increased 0.6% to a seasonally adjusted rate of 6.69 million in January. Sales are currently up 23.7% from one year ago. Housing inventory sits at 1.04 million units. Down 1.9% over last month. Down 25.7% over last year. Unsold inventory sits at an all-time low 1.9 month supply. The median existing home price for all housing types was $303,900.
Housing Starts – Released 2/18/2021 – New home starts in January were at a seasonally adjusted annual rate of 1.580 million; down 6.0% below December and 2.3% below last January’s rate. Building Permits were at a seasonally adjusted annual rate of 1.881 million, up 10.4% compared to December and up 22.5% over last year.
Retail Sales – Released 2/17/2021 – U.S. retail sales for January increased 5.3% to $568.2 billion. U.S. retail sales are up 7.4% year/y.
Industrial Production and Capacity Utilization – Released 2/17/2021 – In January Industrial production increased 0.9%. Manufacturing increased 1.0%. Mining increased 2.3%. Utilities output declined 1.2%. Total industrial production was 107.2% of its 2012 average which is 1.8% lower in January than a year ago. Total capacity utilization increased 0.7% to 75.6% in January which is 4.0% below its long run average.
Next week we get data on Industrial Production and Capacity Utilization, Retail Sales, and Housing Starts.