The Daily Advisor: July 26, 2024
1. FHLBank Chicago Announces Q2 2024 Financial Highlights
We have increased our commitment to over $180 million for affordable housing and community development initiatives this year and we remain dedicated to leveraging our financial strength to support our members in reinvesting in their communities.
2. Register Today for an MPF® Webinar
Sign-up for complimentary Mortgage Partnership Finance® (MPF) webinars and receive invaluable information and training from the industry's most-respected voices.
3. Institutional Insights Webinar On-Demand Recording Available
Did you miss yesterday’s Institutional Insights Webinar? Watch the July presentation recording where we focused on what is in store for the economy the remainder of this year.
Market Commentary
Longer-dated treasuries rallied, and equities finished the day mostly lower. Treasuries began the day on a stronger note but slid down immediately after the stronger-than-expected Q2 gross domestic product (GDP) report. To close the day, shorter tenors finished lower, while the 10- and 30-year yields held onto their gains. Markets currently see a slim chance for a rate cut of at least 25 basis points (bps) at the July Federal Open Market Committee (FOMC) meeting but are fully pricing in a September cut according to CME's FedWatch Tool.
Real GDP increased at an annual rate of 2.8% in Q2 of 2024, compared to the previous quarter's 1.4%. This quarter, GDP growth reflected a rise in consumer spending, private inventory investment, and nonresidential fixed investment. Compared to Q1, there was an upturn in private inventory investment and acceleration in consumer spending, counteracted by a decline in residential fixed investment and rise in imports (capital goods). Quarter-over-quarter, the Personal Consumption Expenditures (PCE) price index increased by 2.6%, compared to last quarter's 3.4%, and core PCE prices increased 2.9%, compared to last quarter's 3.7%.
Initial jobless claims are at 235K in the week ending July 20, down 10K from the previous week's upwardly revised 245K. The decline brought the four-week moving average to 235K, up 250 from the previous week. Continuing jobless claims in the week ending July 13 are at 1,851K, down 9K from the previous week's downwardly revised 1,860K. The decline brought the 4-week moving average to 1853.5K, up 4.75K from the previous week and the highest level since December 2021.
New durable goods orders are down 6.6% month-over-month in June 2024, following a 0.1% increase in May and four consecutive monthly increases. Excluding transportation, new orders are up 0.5%, and excluding defense, new orders are down 7%. Transportation was the main driver of the decrease, down 20.5%, while orders also fell for capital goods (-18.4%).
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