The Market Today

U.S. Economy Weathering Delta Wave Keeping a 2021 Taper on the Table

by Craig Dismuke, Dudley Carter

CORONAVIRUS UPDATE  Vining Sparks Coronavirus Chartbook and Vining Sparks Coronavirus State Charts

FDA to Discuss Boosters: Advisers to the FDA are meeting today to discuss guidance on booster shots.  As highlighted yesterday, the pharmaceutical companies have pitched the need citing declining efficacy over time and the White House has laid out plans to make boosters available beginning September 20th.  Medical professionals remain divided on the topic.


Consumer Confidence Expected to Turn as COVID-19 Growth Slows: The University of Michigan will release its preliminary September report on consumer confidence at 9:00 a.m. CT.  Rising prices and COVID-19 cases have combined to drag sentiment lower in recent reports.


U.S. Economy Weathering Delta Wave Keeping a 2021 Fed Taper on the Table: Yesterday’s stronger-than-expected economic data added to the flood of recent reports showing the U.S. economy weathering COVID-19’s Delta wave.  Already this week, business confidence (August), weekly mortgage applications for home purchases, and the New York Fed manufacturing index (September) have beaten economists’ expectations. In yesterday’s reports, consumer spending (August), continuing jobless claims, and the Philadelphia Fed’s manufacturing index (September) added to the more-resilient-than-expected data.  While some of the gains in retail sales spending were driven by an increase in online sales, perhaps COVID-19-related, the overall level of activity was encouraging nonetheless.  The data put some of the wind back into the taper outlook and pushed longer Treasury yields and the Dollar incrementally higher.  The 10-year yield rose almost 5 bps immediately following the data’s release, reaching 1.35% before closing the day at 1.34%.  Equities were mixed with the DJIA and S&P both falling 0.2% but the Nasdaq gaining 0.1%. Consumer discretionary stocks led the way gaining 0.4%. Markets have been relatively calm overnight.  The 10-year Treasury is fractionally higher and U.S. equity futures point to another decline.


GM Plans to Idle Factories Longer Amid Chip Shortage (WSJ): “General Motors is extending its plans to idle some of its North American factories, compounding the effects of the world-wide semiconductor shortage on the auto maker’s production. … The company said Thursday it will add to scheduled downtime at seven plants in the U.S., Canada and Mexico.” The article continued, “More recently, a new wave of COVID-19 infections in Malaysia and other Southeast Asian countries with a major role in chip production has set back manufacturing at factories that were already straining to run at full tilt.”

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