March 26, 2020
Chief Economist Scott Brown discusses the latest market data.
February’s bad weather continued to affect the economic data reports, with declines in new and existing home sales, as well as durable goods orders and shipments. Personal income fell 7.1% in February, reflecting January’s direct deposits (which have also gone out in March). Personal spending fell 1.0%, following a 3.4% gain in January. Even with the bad weather, consumer spending on durable goods was up 17.2% from a year ago, while spending on services (which is roughly six times the spending in durables) remains down 5.2%.
Treasury Secretary Yellen and Fed Chair Powell covered no new ground in their congressional testimony, but bond yields edged down (before rising again on Friday).
Next week, the stock market will be closed for the Good Friday holiday, but SIFMA recommends that the bond market be open until noon that day. Good Friday is not a federal holiday, so the Bureau of Labor Statistics will release the March Employment Report (which explains why the bond market will be on a half day). Nonfarm payrolls are expected to post a strong gain, partly reflecting a rebound from February’s bad weather. The other March data reports (consumer confidence, ISM manufacturing) should also reflect improvement.
|Last||Last Week||YTD return %|
Consumer Money Rates
|Last||1 year ago|
|Last||1 year ago|
|Dollars per British Pound||1.3734||1.220|
|Dollars per Euro||1.1764||1.032|
|Japanese Yen per Dollar||109.19||109.58|
|Canadian Dollars per Dollar||1.261||1.402|
|Mexican Peso per Dollar||20.677||22.945|
|Last||1 year ago|
|Last||1 month ago|
|10-year municipal (TEY)||1.65||1.72|
Treasury Yield Curve – 03/26/2021
As of close of business 03/25/2021
S&P Sector Performance (YTD) – 03/26/2021
|March 30||—||CB Consumer Confidence (March)|
|March 31||—||ADP Payroll Estimate (March|
|—||Chicago Business Barometer (March)|
|—||Pending Home Sales Index (February)|
|April 1||—||Jobless Claims (week ending March 27)|
|—||ISM Manufacturing (March)|
|April 2||—||Good Friday Holiday (stock market closed, half day for bonds)|
|—||Employment Report (March)|
|April 5||—||ISM Services Index (March)|
|April 7||—||Trade Balance (February)|
|—||FOMC Minutes (March 16-17)|
|April 27||—||Real GDP (2Q20, advance estimate)|
|April 28||—||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 March 25, 2021.
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