Stocks Stabilize with Small Losses

June 19, 2017 - Morningstar


US. Treasuries are still trading higher this morning although the gains have broadened across the yield curve as the 2-year note pull back from its high. The U.S. economic data this week has been disappointing on the output, price, and sentiment fronts:
On output, retail sales and housing starts both missed forecasts while at least industrial production came out as expected
On prices, the core PPI beat estimates for May (0.3% m/m vs. consensus 0.3%) but the CPI and core CPI both missed by a tenth (-0.1% and 0.1%, respectively)
On sentiment, the Michigan Sentiment Index fell to a post-U.S. election low (94.5 vs. consensus 97.0) and the NAHB Housing Market Index fell to 67 from 69 ( consensus 70). The Empire Manufacturing Index, however, jumped to a two-year high (19.8 vs. consensus 6.0).
The S&P 500 is down 0.16% to 2,428.5 and WTI crude is adding 0.47% to $44.67/bbl.
The U.S. Dollar Index is down 0.28% at 97.16 and gold is up 0.16% at $1,256.4/troy oz.
The Atlanta Fed's GDPNow model forecast for Q2 fell to 2.9% today from 3.2% on Wednesday:
The forecast for Q2 real residential investment growth decreased from 1.8% to 0.4% after this morning's housing starts release. The forecast of the contribution of net exports to Q2 growth declined from -0.23 percentage points to -0.34 percentage points after yesterday's Import/Export Price Index release
The New York Fed's Nowcast estimate for Q2 GDP growth is down to 1.9% (previous 2.3%)
The estimate for Q3 growth is 1.5% (previous 1.8%).
Yield Check:
2-yr: -5 bps to 1.31%;
5-yr: -2 bps to 1.74%;
10-yr: unch at 2.16%;
30-yr: unch at 2.79%.