U.S. and World News
- Retail sales rose 0.7% in August, rebounding from a drop in July. The 70 basis point increase was driven by schools, college campuses and offices reopening, and consumers spending more for groceries and merchandise at big-box stores. Meanwhile, initial jobless claims rose 20,000 last week to 332,000 but remained near a pandemic low. Layoffs caused by Hurricane Ida, which hit Louisiana in late August, likely contributed to the increase. As cases of vaccinated citizens increases, new masks mandates implemented by the government, and capacity restrictions in public places have a direct impact in certain areas such as restaurants, who reported flat revenue last month. Moreover, Americans in recent weeks have cut spending on travel, and multiple artists have canceled concerts. Such spending isn’t captured in retail sales statistics, which mostly covers goods such as cellphones, televisions, groceries and back-to-school goods.
- Early this week the President Joe Biden proposed a set of tax increases and enforcements that could offset up to $3.5T in spending that is currently being proposed by House Democrats. This proposal includes an in tax rate to 26.5% from 21.0% 5.5% for corporations as well as raising the top individual rate to 39.6%. Meanwhile, the top capital gain tax rate would be raised by 5% to 25% from 20%, and a 3% surtax on people making over $5M have been proposed. With the proposed offsets to spending on the table, the debate on the Democrat proposal can now begin in earnest.
- Markets were down this week. The S&P 500 decreased by -0.54% and closed at 4,432.99. Meanwhile, the Dow Jones was down by -0.04% and closed at 34,584.88. Year-to-date, the S&P 500 is up 19.24% and the Dow Jones is up 14.57%.
- Yields moved very little this week. The 5 year and 10 year U.S. Treasury Notes are yielding 0.86% and 1.37%, respectively.
- The spot price of WTI Crude increased this week. Prices increased +2.11% and closed at $71.94 per barrel. Year to date, Oil prices are up +48.26%.
- The spot price of Gold decreased by -2.27% and closed at $1,752.83 per ounce. Year to date, Gold prices are down –7.70%.
- Initial claims 332,000 for the week ended September 11, prior revised 312,000
- CPI rose +0.3% month over month for August, median forecast +0.4%, prior +0.5%
- Core CPI increased month over month +0.1% for August, median forecast +0.3%, prior +0.3%
- CPI year over year rose +5.3% for August, median forecast +5.3%, prior +5.4%
- Import prices decreased -0.3% month over month for August, +9.0% year over year vs. median forecast +0.2%, prior revised +0.4%
- Import prices ex-petroleum -0.1% month over month for August, up +5.9% year over year vs. median forecast +0.2%, prior revised +0.3%
- Empire manufacturing index +34.3 for September vs. median forecast +17.9, prior +18.3
- Industrial production +0.4% for August, median forecast +0.5%, prior revised +0.8%
Fact of the Week
3.2 million Americans retired in 2020, a +56% increase over the average 2.05 million Americans who retired over the previous 8 years, i.e., 2012-2019 (source: Pew Research Center).
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