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From the Desk - Economic Commentary

Brandon Casey, Member Strategies - 8/15/2022

U.S. stocks are lower to begin the week as slowing economic growth in China has raised concerns about the global economy. Domestically, after better than expected inflation data last week, investors are hopeful that the Fed will begin slowing rate hikes in September after an aggressive summer. The release of the latest FOMC minutes and additional Fed comments this week could help provide a clearer picture.

Looking at economic data today, the Empire State Manufacturing Index plunged into contraction territory at a reading of -31.3 in August. The index had been expected to fall roughly six points to 5.0. New orders and shipments both posted steep declines.

Elsewhere, the NAHB Housing Market Index fell more than expected to a reading of 49 in August, the first time sentiment has been negative since May 2020. The index has been expected to drop a point to a reading of 54. Future sales, present sales, and prospective buyer traffic all fell.

U.S. Treasury yields are lower this morning, with the 2-year Treasury yield down 5.8 basis points to 3.20%, the 5-year Treasury yield down 7.2 basis points to 2.91%, and the 10-year Treasury yield down 7.2 basis points to 2.78%. Short-term advance rates are higher today, while longer-term rates are higher.

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