U.S. stocks dipped last week with the S&P 500 dropping 1.6% after hitting another all-time high during the week. Emerging markets diverged again last week as they were up by more than 2%.
U.S. Treasury yields fell in a mostly parallel fashion for the week. The 10-year Treasury yield dropped 0.06% and ended the week below the psychologically important barrier of 4.50%.
The holiday shortened week was highlighted by slower than expected Services PMI’s along with a weakening consumer sentiment reading from the University of Michigan’s survey
A look ahead
The Federal Reserve’s preferred inflation gauge, the Personal Consumption Expenditure (PCE) price index, likely will show inflation continued to moderate in January.
Despite hitting the federal government’s debt ceiling earlier this year and tax reforms still up in the air, Treasury Note issuance is scheduled to stay at its normal pace with a 2-, 5-, and 7-year note auction this week that could test demand.
Economic releases: New & Pending Home Sales, Personal Income & Spending, PCE
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