Morning Market Update: February 15, 2019

Treasurys Rallied in Mixed Equity Trading on Weak Retail Sales

Commentary for Thursday: Treasurys rallied while equities ended mixed. The Dow and S&P decreased on the day as the NASDAQ increased. Yields were muted in quiet overnight trading and throughout the early morning. They dropped on weak economic data that reported an unexpected decline in retail sales and were little changed the remainder of the morning following one Fed speech and two Treasury auctions. Yields were muted most of the afternoon but shifted modestly lower late in the day on news around trade tensions.

This Morning: Treasury yields are shifting higher following the release of economic data that reported a lower-than-expected import price index.

Retail sales unexpectedly fell 1.2% in December, the sharpest monthly decline since September 2009. Sales at gasoline stations dropped 5.1%, and sales at non-store retailers fell 3.9%. Partially offsetting the decline, motor vehicle sales and building material sales were the only sectors to increase. Excluding autos, retail sales dropped 1.8%; however, sales remain 2.0% higher than one year ago.

The Producer Price Index decreased 0.1% in January compared to expectations of a 0.1% increase. Food prices and energy prices declined 1.7% and 3.8%, respectively. Trade services rose 0.8% and transportation increased 0.5%. As a result, final demand is 2.0% higher than one year ago. Excluding food and energy, prices rose 0.3% in January and is up 2.5% year-over-year.

Initial jobless claims increased by 4K to 239K in the week ending February 9. The previous week was upwardly revised by 1K to 235K. As a result, the four-week moving average increased by 6.75K to 231.75K, which is the highest level for this average since January 2018. Continuing claims also increased by 37K to 1.773M in the week prior. As a result, the four-week moving average rose by 9K to 1.750M. The insured unemployment rate remained unchanged at 1.2%. 

Financial Markets Research

The morning market update is provided by: 

solutionsheadshots_hotchkiss_smJames Hotchkiss
Director, Member Strategy and Solutions

SolutionsHeadshots_Deven_smMelissa Deven
Director, Member Strategy and Solutions


The data and valuations provided in this document are for information purposes only and are provided as an accommodation and without charge. The Federal Home Loan Bank of Chicago makes no representations or warranties about the accuracy or suitability of any information in this document. This document is not intended to constitute legal, investment, or financial advice or the rendering of legal, consulting, or other professional services of any kind.

Want More Information From Your Sales Director?

Success! Thanks for filling out our form!

*Required Fields