Chief Economist Scott Brown discusses the latest market data.

The major stock market indices were choppy on a day-to-day basis, as investors continued to reevaluate the rally off the lows. The economic data reports were inconsequential.

The Consumer Price Index rose 0.4% in August (-0.2% y/y), also up 0.4% excluding food & energy (+0.3% y/y), boosted partly by a 5.4% increase in the index for used cars and trucks. The Producer Price Index rose 0.3% in August (-0.2% y/y), up 0.3% excluding food, energy and trade services (+0.3% y/y). There were mixed signs of pipeline inflation pressures at the earlier stages of production. Ex-food & energy, the index for processed intermediate goods rose 0.5% (-1.1% y/y) and the index for unprocessed intermediate goods rose 1.7% (+5.7% y/y). Lumber rose 10.5% (+27.6% y/y, most of that in the last three months). Jobless claims, a leading economic indicator, totaled 885,000 in the week ending September 5, the second week under the revised seasonal adjustment – still extremely high by historical standards (although less horrific than in March and April).

Next week, the focus is expected to be on the Fed, not that there is any suspense about what they will do (leave short-term interest rates unchanged). Instead, financial market participants will look to the Fed’s revised economic projections and Powell’s press conference. The Fed should recognize that the initial rebound from the social distancing effects of March and April was relatively strong in May, June and July – but that’s still only a partial recovery and the pace of improvement in the economy appeared to slow in August. The mid-month data (retail sales, industrial production) should reinforce that view. In his press conference, Chair Powell is expected to speak further on the Fed’s revised monetary policy framework. Residential construction figures for August should be strong.

Indices

  Last Last Week YTD return %
DJIA 27901.98 27534.58 -2.23%
NASDAQ 10910.28 10819.59 21.60%
S&P 500 3357.01 3339.19 3.91%
MSCI EAFE 1911.18 1897.15 -6.17%
Russell 2000 1542.60 1507.75 -7.54%

Consumer Money Rates

  Last 1 year ago
Prime Rate 3.25 5.00
Fed Funds 0.08 2.15
30-year mortgage 3.02 3.77

Currencies

  Last 1 year ago
Dollars per British Pound 1.2973 1.247
Dollars per Euro 1.1848 1.103
Japanese Yen per Dollar 104.74 108.45
Canadian Dollars per Dollar 1.317 1.329
Mexican Peso per Dollar 20.869 19.397

Commodities

  Last 1 year ago
Crude Oil 40.97 58.11
Gold 1949.90 1515.80

Bond Rates

  Last 1 month ago
2-year treasury 0.13 0.14
10-year treasury 0.67 0.62
10-year municipal (TEY) 1.26 1.11