General market news
- The 10-year Treasury was down on Monday morning, opening at 2.58 percent. This is its lowest level since January 3, when it hit 2.55 percent. The 2-year, 5-year, and 30-year Treasuries opened at 2.43 percent, 2.40 percent, and 3.02 percent, respectively. The short end of the curve remains inverted, with the 2-year Treasury yielding more than the 5-year. The long end of the curve remains about 60 basis points over the short end of the curve.
- The markets were up across the board last week. The Dow Jones Industrial Average lagged, as Boeing fell by more than 10 percent following the second crash of its new 737 MAX 8 aircraft.
- The news surrounding the U.S.-China trade talks was relatively quiet, with expectations for a deal to be pushed out to at least April. Chinese Premier Li Keqiang suggested that additional monetary, regulatory, and stimulus measures would be taken to counter recent pressures on the country’s economic growth. This follows a dovish trend from central banks worldwide.
- Last week was packed with economic data releases. On Monday, January’s retail salesdata came in better than expected, with 0.2-percent growth. This was a strong result following a decline in December.
- On Tuesday, February’s Consumer Price Indexwas released. Consumer inflation grew by 0.2 percent during the month, leading to an annual increase of 1.5 percent. On Wednesday, the Producer Price Index had similar results, with a 0.1-percent monthly growth rate leading to an annual increase of 1.9 percent.
- On Thursday, new home salesin January disappointed, falling by 6.9 percent. Economists expected modest growth, so this large decline is concerning.
| Equity Index | Week-to-Date | Month-to-Date | Year-to-Date | 12-Month |
| S&P 500 | 2.95% | 1.46% | 13.11% | 4.80% |
| Nasdaq Composite | 3.81% | 2.13% | 16.16% | 3.89% |
| DJIA | 1.64% | –0.13% | 11.47% | 6.35% |
| MSCI EAFE | 2.81% | 1.13% | 10.53% | –4.51% |
| MSCI Emerging Markets | 2.67% | 0.68% | 9.76% | –10.57% |
| Russell 2000 | 2.13% | –1.30% | 15.51% | –0.12% |
Source: Bloomberg
| Fixed Income Index | Month-to-Date | Year-to-Date | 12-Month |
| U.S. Broad Market | 0.71% | 1.72% | 3.72% |
| U.S. Treasury | 0.67% | 0.87% | 3.52% |
| U.S. Mortgages | 0.65% | 1.35% | 4.02% |
| Municipal Bond | 0.50% | 1.80% | 4.57% |
Source: Morningstar Direct
What to look forward to
Next week will be a slow one for economic news, consisting of housing reports and the regular meeting of the Federal Reserve (Fed).
On Monday, the National Association of Home Builders will release its industry survey. It is expected to rise from 62 to 63, reflecting continued moderate confidence in the homebuilding market. With interest rates declining, affordability is showing improvement, making such an increase seem pretty reasonable.
On Wednesday, the regular meeting of the Federal Open Market Committee will conclude with the release of the policy announcement and a press conference with Fed Chair Jerome Powell. Expectations are for the Fed to hold steady on interest rates, but the focus will be on whether and how the future projections for economic growth and rate changes have shifted. Weak inflation data from last week, as well as slowing economic growth in the first quarter, support expectations that the Fed will dial back its projects and that rate increases will remain on hold.
On Friday, the existing home sales report is expected to increase from $4.9 million to $5.1 million in sales on an annualized basis. Such an improvement would indicate that the housing market is stabilizing after a slowdown. This result would be consistent with the rise in affordability and would be a positive economic indicator.