Equity markets rebounded this week, most up 10% or more. Two macro forces have driven markets, both equity and fixed income, into disarray. Offered yields on ultrashort Treasury bills are current negative, the first time since WWII. Unemployment claims jumped from around 200k last week to 3.28 million this week, which is the highest since tracking began in 1967. The previous high was 695k, in October 1982. There is no doubt that we are in a quarantine inflicted recession.




Fixed Income

3/15/2020 Statement

FOMC December Statement     Federal Reserve Dot Plots     US Debt Measurement    US Corporate Debt Tops $6 Trillion   Treasury.gov yields

FOMC Policy Normalization Statement


Global Bond Yields


Daily US Treasury Yields 


Foreign Exchange Market


Energy Complex

The Baker Hughes rig count was down 44 this week. There are 728 oil and gas rigs operating in the US – down 278 over last year.

  • Brent Crude Oil lost 3.62% this week closing at $27.95/bbl
  • WTI Crude Oil lost 4.95% this week to close at $21.51/bbl
  • Heating Oil gained 5.39% this week closing at $1.07/gallon
  • Natural Gas lost 0.24% this week closing at $1.67 per million BTUs
  • Unleaded Gas lost 2.31% this week closing at $0.61/gallon

Metals Complex

  • Gold gained 11.42% this week closing at $1654.10/oz
  • Silver gained 17.35% on the week closing at $14.53/oz
  • Palladium gained 42.63% this week closing at $2196.80/oz
  • Platinum gained 19.13% this week closing at $741.60/oz
  • Copper gained 0.02% this week closing at $2.17/lb

Employment Picture

Weekly Unemployment Claims – Released Thursday 3/26/2020 – In the week ending March 21th, initial claims were 3,283,000, an increase of 3,001,000 from the previous week’s revised level. The 4-week moving average was 998,250, an increase of 765,750 from the previous week’s revised average.

Job Openings & Labor Turnover Survey JOLTS – Released 3/17/2020 – The U.S. Bureau of Labor Statistics reported the number of job openings increased from 7.0 million to 6.8 million on the last business day of January. Over the month, hires and separations were little changed at 5.8 million and 5.6 million, respectively.  Within separations, the quits rate was unchanged at 2.3%. The layoffs and discharges rates were little changed at 1.1%.

February Jobs Report –  BLS Summary – Released 3/6/2020 – The US Economy added 273k nonfarm jobs in February and the Unemployment rate was little changed at 3.5%. Average hourly earnings increased by 9 cents. Hiring highlights include Education and Health Services +54k, Construction +42k, Government +44k, and Leisure and Hospitality +51k.

  • Average hourly earnings increased by 9 cents in February, y/y hourly earnings are up 3.0%.
  • U3 unemployment rate was little changed at 3.5%. U6 unemployment rate increased 0.1% to 7.0%.
  • The labor force participation rate was unchanged in February at 63.4%.
  • Average workweek increased by 0.1 hour to 34.4 hours.

Employment Cost Index – Released 1/31/2020 – Compensation costs for civilian workers increased 0.7% for the 3-month period ending in December 2019. The 12 month period ending on December 2019 saw compensation costs increase by 2.7%, 0.2% less than the 12 month period ending December 2018. Wages and salaries were up 2.9% for the 12-month period ending December 2019 compared to 3.1% for the 12 month period ending December 2018. Benefit costs increased 2.2% for the 12-month period ending December 2019. For private industry workers, compensation costs increased 2.7% year-over-year, versus 3.0% for the 12 months ending December 2018. This report is published quarterly.


This Week’s Economic Data

Links take you to the data source

Personal Income – Released 3/27 – Personal Income increased 0.6% in February according to the BEA. The majority of the increase in February was due to increases in compensation of employees and increases in farm proprietor’s income. Real PCE (the Feds preferred inflation gauge) increased 0.1% in February. Real disposable personal income increased 0.4% in February.  

Third Estimate of 4th Quarter and Year 2019 GDP  – Released 3/26 – According to the Third Estimate released by the Bureau of Economic Analysis, Real Gross Domestic Product (Real GDP) increased at an annual rate of 2.1% in the fourth quarter of 2019.  The third estimate is based on data that are more complete than were available for the advance estimate. The third estimate saw a positive revision to PCE that was largely offset by a negative revision to federal gov’t spending and nonresidential fixed investment.  The fourth-quarter increase in real GDP observed positive contributions from personal consumption expenditures (PCE), federal gov’t spending, state and local gov’t spending, residential fixed investment, and exports that were partly offset by negative contributions from private inventory investment, nonresidential fixed investment, and imports (which decreased). The Advance Estimate of first-quarter GDP growth for 2020 will be released on April 29, 2020.  

Durable Goods – Released 3/25 – New orders for manufactured durable goods increased $2.9 billion or 1.2% to $249.4 billion in February. The increase follows a 0.1% increase in January and makes new orders for durable goods up four of the last five months. Transportation equipment drove the increase; up $3.8 billion or 4.6%.

New Residential Sales – Released 3/24 – Sales of new single-family homes declined 4.4% to 765k, seasonally adjusted, in February. The median sales price of new homes sold in February was $345,900 with an average sales price of $403,800. At the end of February, the seasonally adjusted estimate of new homes for sale was 319k. This represents a supply of 5.0 months at the current sales rate.

Recent Economic Data

Links take you to the data source

Existing Home Sales – Released 3/20 – Existing home sales increased in February. Sales increased 6.5% to a seasonally adjusted rate of 5.77 million. Sales are currently up 7.2% from one year ago. Housing inventory sits at 3.10 months of inventory. Up 5.0% over last month. The median sales price for all types of homes was $270,100, up 8.0% year/y.

Housing Starts – Released 3/18 – New home starts in February were at a seasonally adjusted annual rate of 1.599 million; down 1.5% below January but 39.2% above last February’s rate. Building Permits were at a seasonally adjusted annual rate of 1.464 million, up 5.5% compared to January and up 13.8  over last year. 

Industrial Production and Capacity Utilization – Released 3/17 – In February Industrial production gained 0.6% after declining 0.5% in January. Manufacturing increased 0.1% and mining declined 1.5%. Industrial production was unchanged at 109.6% year/y.  Total capacity utilization increased 0.4% to 77.0% in February which is 2.8% below its long-run average. 

Retail Sales – Released 3/17 – U.S. retail sales for February declined 0.5% to $528.1 billion. U.S. retail sales are up 4.3% year/y. 

Producer Price Index – Released 3/12 – The Producer Price Index for final demand declined 0.6% in February. Core PPI was down 0.1%. Year over year the index for final demand rose 1.3%.  

Consumer Price Index – Released 3/11 – The Consumer Price Index gained 0.1% in February. Core CPI, which excludes food and energy increased 0.2%. The monthly changes left total CPI up 2.3% year-over-year and core CPI up 2.4%.

Consumer Credit – Released 3/6 – Consumer credit increased at a seasonally adjusted annual rate of 3.50% in January. Revolving and nonrevolving credit increased at annual rates of 3.25% and increased 5.75% respectively. Total Outstanding consumer credit is currently at $4.2027 trillion.

U.S. Trade Balance  Released 3/6 –  According to the U.S. Census Bureau of Economic Analysis, the goods and services deficit declined in January to $45.3 billion. This increase is $3.3 billion lower than the deficit recorded in December. January exports were $208.6 billion, $0.9 billion less than December exports. January imports were $253.9 billion, $4.2 billion less than December imports. The goods and services deficit increased $8.5 billion or 15.8% year/y. Year – over – year exports and imports increased $2.3 billion or 1.1% and decreased $6.2 billion or 2.4% respectively.  

PMI Non-Manufacturing Index (ISM Services) – Released 3/4 – Economic activity in the non-manufacturing sector grew in February for the 121st consecutive month. ISM Non-Manufacturing registered 57.3 percent, which is 1.8 percentage points above the adjusted January reading of 55.5 percent. This represents continued growth in the non-manufacturing sector, at a faster rate. 

PMI Manufacturing ISM Index  Released 3/2 – February PMI declined 0.8% to 50.1% from January’s reading of 50.9%. The New Orders Index was down 2.2% from January’s reading of 52.0% to 49.8%. The Production Index registered 50.3%, down 4.0%.

U.S. Construction Spending – Released 3/2 – Construction spending increased 1.8% in January measuring at a seasonally adjusted annual rate of $1,369.2 billion. The January figure is 6.8% above the January 2019 estimate. Private construction spending was 1.5% above the revised December estimate at $1,007.6 billion. Public construction spending was 2.6% above the revised December estimate at $337.8 billion. 

Chicago PMI Released 2/28  Chicago PMI increased 6.1 points increasing to 49.0, up from 42.9 in January. This marks the highest reading since August 2019. The index is up three of the last four months yet the index is still in contractionary territory and has been for six consecutive months. Production and Supplier Deliveries showed the greatest gains and Employment was the only indicator to decline in February. 

US Light Vehicle Sales – Released 2/28 – U.S. light-vehicle sales were at a seasonally adjusted annual rate (SAAR) of 16.81 million units in January.

Consumer Confidence Released 2/25  The Consumer confidence index increased slightly in February following an increase in January. The Index now shows a reading of 130.7 which is up from 130.4 in January. Consumers continue to view current conditions favorably. 

Next week we get data on Consumer Confidence, Chicago PMI, U.S. Construction Spending, ISM Services, the PMI Manufacturing ISM Index, the U.S. Trade Balance, and the March Jobs Report. 


Data Sources:

Bureau of Economic Analysis (BEA)
Congressional Budget Office (CBO)
U.S. Bureau of Labor Statistics (BLS)
Federal Reserve Economic Data (FRED Charts)

CME Fed Watch
U.S. Treasury – Yields
U.S. Census Bureau
Institute for Supply Management (ISM)
Weekly DOL Employment Data
BLS Monthly Jobs Report

US Energy Admin (EIA)
BLS Consumer Price Index CPI
BLS Producer Price Index PPI
Atlanta Fed GDPNOW
NY Fed Nowcast GDP
US Census Bureau Housing Starts

Consumer Credit
USCB Retail Sales
Construction Spending
Federal Reserve Dot Plots
NY Empire Index
Philadelphia Federal Reserve
P/E Ratio Data -Yardeni Research

Technical Analysis Info:

StockCharts.com – Financial Charts
Exponential vs Simple moving average

Other Links:

1973 Arab Oil Embargo
Hunt Brothers Silver
Long-Term Capital bailout