SPUS - Weekly Market Pulse: The Fed Gets Its Wish
2024-07-08 07:55:00 ET
Summary
- The S&P Global US composite PMI was a little less than expected but above 50 at 51.6 while the ISM manufacturing PMI was slightly less than expected at 48.5.
- Construction spending, which has been an economic bright spot for at least the last year, was reported down for May by 0.1%, the first negative reading since October of 2022.
- The employment report was not particularly bad, but the trend is negative, especially over the last quarter.
The economic data wasn’t particularly shocking or weak, but it seemed as if last week may have marked a change in the economic outlook. The 10-year Treasury note yield only fell 7 basis points on the week, but that only tells part of the story. Rates rose strongly on Monday, up 15 basis points at the high of the day. There was little economic news, and what there was shouldn’t have moved the market that much. The S&P Global US composite PMI was a little less than expected but above 50 at 51.6 while the ISM manufacturing PMI was slightly less than expected at 48.5. In addition, the prices component, which has on several occasions produced negative bond market reactions, was down more than expected. New orders were up but were about as expected at 49.3 and still less than 50. Construction spending, which has been an economic bright spot for at least the last year, was reported down for May by 0.1%, the first negative reading since October of 2022. Construction spending on manufacturing facilities was up on the month by 1.3%, but that wasn’t enough to offset weakness elsewhere. That doesn’t sound like the ingredients for a bond selloff to me....
Weekly Market Pulse: The Fed Gets Its Wish