The yield curve flattened slightly during this holiday-shortened week as markets responded to news of a slowing increase in coronavirus spread, an escalation of geopolitical tensions with China, and a continued run of awful economic data.
Advances in US equities were partially reversed later in the week as President Trump considered new sanctions and punitive trade measures in response to China's moves curbing Hong Kong's autonomy. The escalation in trade hostilities also comes as China has been criticized by the administration for not purchasing agreed-upon quantities of U.S. agricultural goods.
The week's economic releases were led by April's consumer spending data, which showed an astonishing 13.6% monthly decline despite income increases as consumers were unable (or unwilling) to spend the stimulus payments received during the month. A small measure of optimism could be taken from the housing market, as April's new home sales posted an unexpected increase.