Resources

February 19, 2020

Chief Economist Scott Brown discusses the latest market data.

Retail sales jumped 5.3% in January (+7.4% y/y), up 5.9% ex-autos (+6.1% y/y). Some of January’s strength reflected a smaller decline in the unadjusted figures (-17.3%, vs. -18.5% in January 2020) following a weak holiday shopping season. However, unadjusted figures were still substantially higher than a year ago, suggesting that improvement was likely fueled by the resumption of extended unemployment benefits. Industrial production rose 0.9% in January (-1.8% y/y). Manufacturing output rose 1.0% (-1.2% y/y). Single-family building permits rose 3.8% in January (+29.9% y/y and up 55% from two years ago)

The Producer Price Index jumped 1.3% in January (1.7% y/y), reflecting supply chain constraints and a rebound in prices that were restrained due to the pandemic. Ex-food and energy, the index for unprocessed intermediate goods rose 8.9% (24.9% y/y). Import prices rose 1.4% in January (0.9% y/y), up 0.8% (2.6% y/y) ex-food and fuels. Ex-fuels, prices of imported raw materials rose 4.3% (13.3% y/y), while the index for consumer goods ex-autos edged down 0.1% (0.1% y/y).

Next week, Fed Chair Powell is expected to cover no new ground in his prepared monetary policy testimony to Congress on Tuesday and Wednesday, but investors will tune into the Q&A for any comments about asset valuations and inflation. The second estimate of 4Q20 GDP growth is expected to be close to the advance figure. January personal income and spending data will reflect the increase in pandemic assistance, while the core PCE Price Index should be mild.

Indices

	Last	Last Week	YTD return %
DJIA	31493.34	31430.70	2.90%
NASDAQ	13865.36	14025.77	7.58%
S&P 500	3913.97	3916.38	4.20%
MSCI EAFE	2222.06	2221.46	3.47%
Russell 2000	2218.39	2285.32	12.33%

Consumer Money Rates

	Last	1 year ago
Prime Rate	3.25	4.75
Fed Funds	0.08	1.58
30-year mortgage	3.01	3.45

Currencies

	Last	1 year ago
Dollars per British Pound	1.3975	1.292
Dollars per Euro	1.2092	1.081
Japanese Yen per Dollar	105.69	111.37
Canadian Dollars per Dollar	1.268	1.322
Mexican Peso per Dollar	20.309	18.563

Commodities

	Last	1 year ago
Crude Oil	60.52	53.29
Gold	1775.00	1611.80

Bond Rates

	Last	1 month ago
2-year treasury	0.11	0.12
10-year treasury	1.31	1.08
10-year municipal (TEY)	1.25	1.17

 

Treasury Yield Curve – 02/19/2021

As of close of business 02/18/2021

S&P Sector Performance (YTD) – 02/19/2021

Febrary 22 —  Leading Economic Indicators (January) February 23  —  Powell Monetary Policy Testimony (Senate)  —  CB Consumer Confidence (February) February 24  —  Powell Monetary Policy (House)  —  New Home Sales (January) February 25  —  Jobless Claims (week ending 2/20)  —  Real GDP (4Q20, 2nd estimate)  —  Durable Goods Orders (January)  —  Pending Home Sales Index (January) February 26  —  Personal Income and Spending (January)  —  Chicago Business Barometer (February)  —  UM Consumer Sentiment (February) March 1  —  ISM Manufacturing Index (February) March 5  —  Employment Report (February) March 16 —  FOMC Policy Decision

 

All expressions of opinion reflect the judgment of the Research Department of Raymond James & Associates, Inc. and are subject to change. There is no assurance any of the forecasts mentioned will occur or that any trends mentioned will continue in the future. Investing involves risks including the possible loss of capital. Past performance is not a guarantee of future results. International investing is subject to additional risks such as currency fluctuations, different financial accounting standards by country, and possible political and economic risks, which may be greater in emerging markets. While interest on municipal bonds is generally exempt from federal income tax, it may be subject to the federal alternative minimum tax, and state or local taxes. In addition, certain municipal bonds (such as Build America Bonds) are issued without a federal tax exemption, which subjects the related interest income to federal income tax. Municipal bonds may be subject to capital gains taxes if sold or redeemed at a profit. Taxable Equivalent Yield (TEY) assumes a 35% tax rate.

The Dow Jones Industrial Average is an unmanaged index of 30 widely held stocks. The NASDAQ Composite Index is an unmanaged index of all common stocks listed on the NASDAQ National Stock Market. The S&P 500 is an unmanaged index of 500 widely held stocks. The MSCI EAFE (Europe, Australia, Far East) index is an unmanaged index that is generally considered representative of the international stock market. The Russell 2000 index is an unmanaged index of small cap securities which generally involve greater risks. An investment cannot be made directly in these indexes. The performance noted does not include fees or charges, which would reduce an investor’s returns. U.S. government bonds and treasury bills are guaranteed by the US government and, if held to maturity, offer a fixed rate of return and guaranteed principal value. U.S. government bonds are issued and guaranteed as to the timely payment of principal and interest by the federal government. Treasury bills are certificates reflecting short-term (less than one year) obligations of the U.S. government.

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. Gross Domestic Product (GDP) is the annual total market value of all final goods and services produced domestically by the U.S. The federal funds rate (“Fed Funds”) is the interest rate at which banks and credit unions lend reserve balances to other depository institutions overnight. The prime rate is the underlying index for most credit cards, home equity loans and lines of credit, auto loans, and personal loans. Material prepared by Raymond James for use by financial advisors. Data source: Bloomberg, as of close of business February 18, 2021.