EFFECTIVE 5:00 PM EASTERN TIME: 11/18/97 /_________________\
KEY INDICATOR CURRENT CHANGE FROM LAST YIELD |6-Mth CD :5.80% *|
--------------- --------- ---------------- ------ |11th COFI:4.941% |
3-month T-Bill: 5.14 - down 1 basis pnt -5.28% |6Mo-LIBOR:5.805% |
10 Year T-Note: 102 03/32 - down 1/32 -5.84% |1Yr TBill:5.44% *|
Long Bond.....: 100 23/32 - down 2/32 -6.07% |3Yr TBill:5.76% *|
Dow Jones.....: 7650.82 - down 47.40 |5Yr TBill:5.81% *|
FHLMC 60 day..: 7.38% - up from 7.32% (11/17) |10YrTBill:5.88% *|
FNMA 60 day...: 7.36% - up from 7.29% (11/17) |30YrTBond:6.12% *|
|PRIME - 8.500%|
Todays Interest Rate/Loan Fee Pricing Trend: |DISCOUNT - 5.000%|
*** DOWN/STABLE *** |FED FUNDS- 5.50 |
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* Wkly Average ending 11/14
This morning's Mitsubishi index report on weekly retail sales showed a 0.3% gain for the week ended November 15 after a 0.2% gain in the prior week. Similar to the Mitsubishi report, the Johnson Redbook report on weekly retail sales will be released later this afternoon. Other than this, there are no more major economic reports scheduled for release today.
The rest of the week is fairly light in the economic report department with New Housing Starts due out tomorrow; and, Initial Jobless Claims, the Trade Deficit and the Philadelphia Fed Index on Thursday. Also on Thursday, Fed Chairman Alan Greenspan is scheduled to testify before the Senate Budget Committee regarding Social Security.
The Labor Department reported this morning that the Consumer Price Index (CPI) edged up a modest 0.2% in October, matching the inflation rate of the previous three months as energy prices posted the smallest gain since July. The report was in line with market expectations. For the first 10 months of 1997, the CPI has risen at an annual rate of just 1.8%, compared to a 3.3% increase during 1996.
Excluding the volatile food and energy sectors, the CPI Core Rate was up just 0.2%. That translated into a 2.2% annual rate of increase during the first 10 months, slower than the 2.6% gain in 1996.
The report followed last week's announcement that wholesale prices had edged up just 0.1% in October, suggesting little price pressures in the pipeline.
In the absence of any price acceleration, the Federal Reserve has held interest rates steady since last March. It continued that stance at a policy-making meeting last week and many analysts expect little change in the near future.
Also reported this morning, the Commerce Department said Business Inventories grew 0.7% in September after much smaller gains of 0.2% in July and 0.1% in August. But the growth was outpaced by sales, which jumped 1.3% after a drop of 0.6% a month earlier. That resulted in an inventory-to-sales ratio of just 1.36.
The bond market ended higher yesterday, breaking the recent trend of Treasury prices moving inversely to the prices of stocks. In late trading, the price of the benchmark 30-year Treasury bond was up 20/32, lowering its yield to 6.07% from 6.10% late Friday.
The rise was achieved despite a 125.74-point gain in the Dow Jones Industrial Average (DJIA), which ended at 7698.22. Bullish economic data on Industrial Production and lingering unease about the stability of overseas equity markets kept interest in Treasurys at a high level.
Treasurys lost ground early Monday as investors feared that the 7.96% surge in Japan's Nikkei 225-Stock Index, and the anticipated gain in U.S. stocks, would shift assets away from Treasurys.
Prices rebounded, however. Market participants said that unease over the stability of global equity markets continues to keep wary investors from selling U.S. Treasurys.
Also helping Treasurys was the Federal Reserve's release of October production and capacity-utilization numbers. Industrial production data was lower than economists' predictions with a monthly gain of 0.5% in October, after September's revised rise of 0.5%.
Capacity utilization came in at 84.3%, below the forecast of 84.6%. In addition, September's 2 1/2 -year high of 84.4% was revised down to 84.2%....