Greysteel Capital Markets Update | April 2019

April 2nd, 2019 by Keeley Byer

While some analysts point to the dramatic reduction in interest rates over the past six months as an indicator of a possible recession, the economy and broader market are showing mixed signals. Retail sales unexpectedly fell in February while the Institute for Supply Management’s (ISM) Manufacturing Index rose in March. The S&P index was up over 13% in Q1 2019 and although economic growth continues to slow, the next several months will provide greater clarity in the direction of the U.S. economy.

Greysteel Capital Markets Update | March 2019

March 5th, 2019 by Keeley Byer

The U.S. economy grew a solid 2.6% in the fourth quarter of 2018, and increased 2.9% for the year. Economic growth has trended down over the last several quarters and many economists are projecting slower growth heading into 2019. The Federal Reserve appears content with holding off on any interest rate action in the near future but will observe how the U.S. and global economies perform through the summer. The 10-year Treasury remained largely stable throughout February as the benchmark rate rose just a few basis points for the month.

Greysteel Capital Markets Update | February 2019

February 5th, 2019 by Keeley Byer

January’s economic data gave investors a warm welcome (polar vortex aside) as we kicked off 2019. A much better than anticipated jobs report showed that the economy is still generating a substantial number of jobs while inflation has stayed largely in check. The Federal Reserve did not raise rates this month and provided guidance indicating it has softened its position on future rates hikes in the near future, which helped to keep the 10-Year Treasury flat for the month, ending at 2.63%. All of this was encouraging to the equity markets, as the S&P 500 index was up nearly eight percent…

Greysteel Capital Markets Update | January 2019

January 3rd, 2019 by Keeley Byer

In a tumultuous last month of the year, policymakers and the U.S. economy showed conflicting signs of what to anticipate going forward into 2019. In December, the Federal Reserve raised its benchmark interest rate 25 bps and provided guidance for potentially fewer rate hikes in the new year. Stock market volatility was at a peak and December ended as one of the worst months of performance in history, with all indices down at least 8.7%. As a result of this news and mounting fears of an economic slowdown, the 10-Year Treasury yield saw a precipitous drop in excess of 30 bps, from 3.01% at…

Greysteel Capital Markets Update | December 2018

December 5th, 2018 by Keeley Byer

The 10-year Treasury rate dropped 16 bps in the month of November, kicking off December below 3.00%. While there is still confidence in the strength of the U.S. economy, some investors have concerns of a weakening economy on the horizon. Most economists still anticipate the Fed will increase short-term rates before the end of 2018, but there is uncertainty about the number of increases in 2019 as the Fed assesses economic conditions heading into the New Year.

Greysteel Capital Markets Update | November 2018

November 2nd, 2018 by Keeley Byer

While the stock market experienced significant weakness and volatility in October (with the worst month for the S&P 500 and Nasdaq in over seven years), other economic indicators remain strong. Wages have grown 2.9% in the past 12 months, with a tightening labor market finally pushing up wages, and unemployment has stayed steady at 3.7%. Interest rates fluctuated throughout October, but the 10-year Treasury rate finished at 3.12%, an increase of just 3 bps for the month. Additional Q3 earnings reports, mid-term election results, as well as further clarity on the economic impact of…

Greysteel Capital Markets Update | October 2018

October 2nd, 2018 by Keeley Byer

While the Federal Reserve hiked its benchmark interest rate a quarter point last week as expected (to a range of 2.00% to 2.25%), some of its additional commentary was noteworthy. Projecting one more rate hike before the end of the year and three more in 2019, the Fed revised its 2018 GDP estimate up, from a 2.8% increase to 3.1%. Despite the optimistic view by the Fed, committee members are projecting declining growth in GDP over the next few years, with a 1.8% growth rate anticipated by 2021.

Greysteel Capital Markets Update | September 2018

September 4th, 2018 by Keeley Byer
U.S. consumer spending in July increased solidly, indicating strong economic growth early in the third quarter, while a measure of underlying inflation hit the Federal Reserve’s 2.00% target for the third time in 2018. These indicators, along with statements from Federal Reserve Chairman Jerome Powell, point to a likely increase in interest rates in September. Long-term interest rates during the month of August have remained steady and slightly down overall, with the 10-Year Treasury rate currently sitting at 2.90%.

Greysteel Capital Markets Update | August 2018

August 1st, 2018 by Keeley Byer
On August 1st, the Federal Reserve held its benchmark interest rate unchanged, while again reaffirming its plans to continue raising borrowing costs at a gradual pace. Economic activity has continued to show strength, as illustrated by last week’s release that the economy grew at an annualized rate of 4.1% in the second quarter, the fastest growth rate in four years. While this growth may have been amplified by some activity being pulled forward ahead of the tariffs now in place, strong consumer spending and business investment were key drivers for the quarter.

Greysteel Capital Markets Update | July 2018

July 2nd, 2018 by Keeley Byer
U.S. Treasury yields have fallen to one-month lows as the fears of a trade war impacting global growth has increased the demand for safe haven assets. These fears sent U.S. stocks lower as investors have been hesitant to take on additional risks. Additionally, the spread between 2-Year and 10-Year Treasury notes traded at 32 basis points at the end of June, which is the flattest level since 2007.