Chief Economist Scott Brown discusses the latest market data.

In the minutes of the July 28-29 FOMC meeting, participants expected no change in policy rates anytime soon, but officials saw a need for more clarity regarding the likely path, such as adopting output-based forward guidance.

Residential construction figures rose much more than expected in July, with single-family permits up 17.0% (+9.4% y/y). The Conference Board’s Index of Leading Economic Indicators rose 1.4% in July, as expected. However, the report noted that “despite recent gains in the LEI, which remain fairly broad-based, the initial post-pandemic recovery appears to be losing steam.” Jobless claims rose above 1.1 million in the week ending August 15. While the headline figure is exaggerated by the seasonal adjustment in August, the unadjusted figure (892,000) remains extremely high by historical standards.

Next week, the 2nd estimate of 2Q20 GDP is likely to show a somewhat smaller rate of decline. The week’s other data, including July personal income and spending figures, durable goods orders, and consumer confidence should remain consistent with a more moderate pace of recovery (following sharp-but-partial improvement in May and June). On Thursday, Fed Chair Powell will speak on the central bank’s review of its monetary policy strategy.

Indices

 

Last

Last Week

YTD return %

DJIA

27739.73

27896.72

-2.80%

NASDAQ

11264.95

11042.50

25.55%

S&P 500

3385.51

3373.43

4.79%

MSCI EAFE

1885.94

1912.76

-7.41%

Russell 2000

1564.30

1579.79

-6.24%

Consumer Money Rates

 

Last

1 year ago

Prime Rate

3.25

5.25

Fed Funds

0.00

2.10

30-year mortgage

3.06

3.65