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What We Do

We provide investment banking, research, sales and trading, asset and wealth management, public finance, insurance, private capital, and family office services.

About Us

We are a family-owned financial services firm that values client relationships, long-term stability, and supporting the communities where we live and work.

The Stephens Story

The idea of family defines our culture, because each of us knows that our reputation is on the line as if our own name was on the door.

Leadership

Our reputation as a leading independent financial services firm is built on the stability of our longstanding and highly experienced senior executives.

Impact Initiatives

We are committed to corporate philanthropy; economic and financial literacy advocacy; and diversity, equity, and inclusion initiatives.

Our Brand Ambassadors

Stephens is proud to sponsor the PGA TOUR, LPGA Tour, and PGA TOUR Champions careers, as well as applaud the philanthropic endeavors, of our Brand Ambassadors.

Making Connections

We host many highly informative meetings each year with clients, industry decision makers, and thought leaders across the U.S. and in Europe.

Our Businesses

Capital Management

We provide fiduciary investment strategies to public-and private-sector institutional clients through asset allocation, consulting, and retirement services.

Fixed Income Sales & Trading

Decades of proven performance and experience in providing tailored fixed income trading and underwriting services to major municipal and corporate issuers.

Institutional Equities and Research

Proven industry-leading research, global market insights, and client-focused execution.

Insurance

Customized risk management, property & casualty, executive strategies and employee benefits solutions that protect our clients over the long term.

Investment Banking

We assist companies with accessing capital through innovative advisory and execution services that help firms achieve their strategic goals.

Private Capital

We have been a trusted and reliable source of capital for private companies for over 70 years.

Private Wealth Management

Our experienced Private Client Group professionals develop customized investment strategies to help clients achieve their financial goals.

Public Finance

We are a trusted municipal advisor with proven expertise in public financings. We also work with clients in negotiated and competitive municipal underwritings.

Market Trends

Weekly Economic Review | September 26, 2022

Sep 26, 2022


Economic Review

The Labor Department reported that initial jobless claims climbed slightly last week from an almost four month low. The labor market remains very tight, however hiring is expected to weaken as the Federal Reserve raises interest rates, with employment being a key sacrifice in the central bank’s effort to bring down inflation. Claims in regular state programs increased 5,000 to 213,000 for the week ending September 17th, after reporting a downwardly revised 208,000 initial claims the prior week. The four-week moving average dropped to 216,750 from 222,750 the prior week. The total number of people continuing to receive regular ongoing state benefits, a report which is lagged one week, decreased 22,000 to 1.379 million for the week ending September 10th.

The National Association of Home Builders/Wells Fargo reported housing sentiment declined in September for the ninth straight month. The loss in builder confidence reflects a surge in mortgage rates to levels above 6% as well as elevated construction costs. The index of builder sentiment fell to 46 in September from 49 last month. The index recorded an 84 in December of 2021.

The Commerce Department reported that housing starts unexpectedly increased in August, driven by gains in multifamily projects. As higher mortgage rates and elevated home prices have pushed home affordability beyond many buyer’s capabilities, builders are focusing more on apartments. Housing starts rose 12.2% in August to a 1,575,000 annualized rate following July’s 1,404,000 pace. Single-family starts climbed 3.4% in August with multi-family starts surging 28.0%. Building permits, a gauge of future construction, fell 10.0% in August to a 1,517,000 pace. This is the lowest level of permits since June of 2020.

The National Association of Realtors reported that existing home sales fell in August for the seventh straight month, a new cycle low. Fed policy tightening is clearly having an impact on the housing sector. Soaring financing costs and elevated home prices are keeping many potential buyers from purchasing a home. The average rate on a 30-year fixed mortgage surged to 6.25% last week. Contract closings, which usually occur a month or two after a contract is signed, decreased 0.4% in August to a 4.80 million pace after dropping 5.7% in July. The median selling price decreased to $389,500 from $399,200 in July.

The FOMC met on Wednesday and the committee raised the fed funds rates by 75 basis points. The targeted Federal Funds Rate is now between 300 basis points and 325 basis points. Chairman Powell’s message was unambiguously hawkish, pointing out the FOMC is resolved to bring inflation down, signaling a greater willingness on the part of the Fed to tolerate economic pain. The dot plot now implies another 75 basis point hike in November. Powell said he wants the real funds rate to reach 1% before pausing. In order to get there with a 4.6% nominal rate, inflation expectations would have to fall by about 100 basis points by March. The interest on reserve balances was increased to 315 basis points from 240 basis points.

The Commerce Department reported a current-account deficit of $251.1 billion during the second quarter of 2022. This compares favorably to a deficit $282.5 in the first quarter. The current account is considered the broadest measure of international trade, covering goods and services as well as income payments and government transfers.

The Conference Board reported the index of leading economic indicators declined 0.3% in August, the sixth straight drop. The loss was led by a decline in building permits, consumer expectations, a drop in new orders and a drop in the average workweek. The index of U.S. leading indicators is a gauge of the economic outlook for the next three to six months. The coincident index, a gauge of current economic activity, climbed 0.1% in August after gaining 0.5% in July.

The Mortgage Bankers Association reported the MBA index of mortgage applications rose last week after five straight weeks of declines. The index increased 3.8% for the week ending September 16th, after declining 1.2% the previous week. Refinancing applications rose 10.4% to 588.1 from 532.9 the prior week. Home purchase mortgage applications increased 1.0% to 200.1. Refinancing made up 32.5% of applications with an average loan size of $267,200, while purchases average loan size was $413,200. The average contract rate on a 30-year fixed-rate mortgage climbed to 6.25% from 6.01% last week.

BOND MARKET REVIEW

Friday’s yields for the 2-, 5-, 10- & 30-year Treasury benchmarks securities were 4.20%, 3.98%, 3.68% and 3.61%. The 2yr/5yr, 5yr/10yr, 10yr/30yr and 2yr/30yr spreads closed at -22, -30, -7, and -59 basis points respectively.

Economic/Events Calendar

Monday

September 26

Aug Chicago Fed Nat Activity Index (0.23)

7:30 Central

Tuesday

September 27

Aug Durable Goods Orders (-0.3%)

7:30 Central

Aug Durables Ex Transportation (0.2%)

7:30 Central

Aug Cap Goods Orders Nondef Ex Air (0.2%)

7:30 Central

Jul FHFA House Price Index (0.0%)

8:00 Central

Jul S&P CoreLogic CS 20-City Index (0.20%)

8:00 Central

Sep Conf Board Consumer Confidence (104.5)

9:00 Central

Aug New Home Sales (500k)

9:00 Central

Wednesday

September 28

Sep 23rd MBA Mortgage Applications

6:00 Central

Aug Goods Trade Balance (-$89.0b)

7:30 Central

Aug Wholesale Inventories (0.5%)

7:30 Central

Aug Retail Inventories (1.0%)

7:30 Central

Aug Pending Home Sales (-1.5%)

9:00 Central

Thursday

September 29

Sep 24th Initial Jobless Claims (215k)

7:30 Central

2nd Qtr Gross Domestic Product (-0.6%)

7:30 Central

2nd Qtr GDP Price Index (8.9%)

7:30 Central

2nd Qtr Personal Consumption (1.5%)

7:30 Central

Friday

September 30

Aug Personal Income (0.3%)

7:30 Central

Aug Personal Spending (0.2%)

7:30 Central

Aug PCE Deflator-YOY (6.0%)

7:30 Central

Sep University of Michigan Sentiment (59.5)

9:00 Central




About the Expert

Troy Clark

Senior Vice President, Fixed Income Strategist, Fixed Income Sales & Trading

Mr. Clark has been in investment banking since 1983. He is a Chartered Financial Analyst. He has been a fixed income strategist at Stephens Inc. since 1996, developing investment strategies, policies and procedures for institutions consistent with overall asset/liability management.

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Source: Bloomberg L.P.
  1. This report has been prepared solely for informative purposes as of its stated date and is not a solicitation, or an offer, to buy or sell any security. All expressions of opinion reflect the judgment of the individual expressing the opinion and are subject to change. This report does not purport to be a complete description of the markets or developments referred to in the material. Information included in the report was obtained from internal and external sources which we consider reliable, but we have not independently verified such information and do not guarantee that it is accurate or complete. Prices, yields, and availability are subject to change with the market. There is no assurance any forward looking statements will be realized or any of the trends mentioned will continue. Nothing in this report is intended, or should be construed, as legal, accounting, regulatory or tax advice. Additional information available upon request. 2022 Stephens Inc., Member NYSE/SIPC.