Written by Sarah Conwell, Portfolio Manager
Headlines of the Week
- Watch Fed Chair Powell deliver his key Jackson Hole economic speech live
- Afghanistan Death Toll Climbs As Pentagon Clarifies 1 Bomber Was Involved In Attack
- Tropical Storm Ida Is Strengthening and Forecast To Slam Gulf Coast As A Major Hurricane Sunday
The US Treasury yield curve steepened in the week, with longer-term Treasury yields increasing as much as 6 basis points.
On Monday, the Markit Manufacturing and Services PMIs fell short of expectations, and both were below consensus estimates and their prior prints. The Manufacturing PMI was released at 61.2 versus a prior 63.4 and expectations of 62.0. The Services PMI released its figures in a similar fashion with August’s figure at 55.2, the prior at 59.9 and expectations of 59.2. Although these missed the mark, both remain firmly in expansionary territory.
The second estimate of Q2 Gross Domestic Product (GDP) was announced yesterday and increased 0.1% from the first estimate, to 6.6%. Personal consumption edged up to 11.9% from 11.8%, business investment (mainly in intellectual property and equipment) increased, and exports increased as well. As you can see in this week’s Chart of the Week, corporate profits improved 9.2% quarter-over-quarter and an impressive 43.4% year-over-year (source: Bureau of Economic Analysis). All-in-all, a relatively strong report that leaves estimates of full-year 2021 growth around 6.2%, according to Bloomberg Economics.
Next week brings another full slate of economic releases, which include: Consumer Confidence, ISM Manufacturing and Services, Durable Goods Orders, Nonfarm Payrolls, the Unemployment Rate, and the Markit PMIs.
Chart of the Week
Indexes used for AAA Municipal Yields
2 Year: BVAL Municipal AAA Yield Curve (Callable) 2 Year (Symbol: CAAA02YR BVLI)
5 Year: BVAL Municipal AAA Yield Curve (Callable) 5 Year (Symbol: CAAA04YR BVLI)
10 Year: BVAL Municipal AAA Yield Curve (Callable) 10 Year (Symbol: CAAA10YR BVLI)
30 Year: BVAL Municipal AAA Yield Curve (Callable) 30 Year (Symbol: CAAA30YR BVLI)
Indexes used for US Treasury Yields
2 Year: US Generic Govt 2 Year Yield (Symbol: USGG2YR)
5 Year: US Generic Govt 5 Year Yield (Symbol: USGG5YR)
10 Year: US Generic Govt 10 Year Yield (Symbol: USGG10YR)
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