A better tone in risk markets overnight has pushed Treasury prices lower and the curve steeper. All major equity indices (domestic and overseas) are in the green today, with S&P 500 futures currently up 0.58%. The catalysts for today’s risk-on move include 1) better PMI data from China and Europe, 2) optimism surrounding U.S./China negotiations, and 3) the possibility of a soft Brexit. The Wall Street Journal is reporting that President Trump continues to heavily criticize the Fed and Jerome Powell in meetings with Republican senators, staffers, and supporters. According to the article, Trump has touted that economic growth and stock prices would be higher and the budget deficit would be rising less if not for previous Fed rate hikes. President Trump also reportedly had a phone call with Powell March 8 in which he told the Fed Chair, “I guess I’m stuck with you.”

Trump announced recently that he would nominate Fed critic Stephen Moore to the Fed Board of Governors, and Moore will likely face stiff opposition from Democrats in the nomination process. The Fed’s sharp pivot in policy and tone from December to January appears, at least on the surface, to be capitulation to rising political pressure, and as such, the White House will likely maintain current rhetoric to apply further pressure to the Fed to reverse at least two of its 25 bps rate hikes in late 2018.

Jason Haley
Managing Director, Investment Management Group
Date Time Event Survey Actual Prior Revised
4/1/2019 Retail Sales Advance MoM 0.20% -0.20% 0.20% 0.70%
4/1/2019 Retail Sales Ex Auto MoM 0.30% -0.40% 0.90% 1.40%
4/1/2019 Retail Sales Ex Auto and Gas 0.30% -0.60% 1.20% 1.70%
4/1/2019 Retail Sales Control Group 0.30% -0.20% 1.10% 1.70%
4/1/2019 Markit US Manufacturing PMI 52.5 52.4 52.5
4/1/2019 ISM Manufacturing 54.5 55.3 54.2
4/1/2019 ISM Employment 57.5 52.3
4/1/2019 ISM Prices Paid 52.5 54.3 49.4
4/1/2019 ISM New Orders 57.4 55.5
4/1/2019 Construction Spending MoM -0.20% 1.00% 1.30% 2.50%
4/1/2019 Business Inventories 0.50% 0.80% 0.60% 0.80%
4/2/2019 Durable Goods Orders -1.80% -1.60% 0.30% 0.10%
4/2/2019 Durables Ex Transportation 0.10% 0.10% -0.20% -0.10%
4/2/2019 Cap Goods Orders Nondef Ex Air 0.10% -0.10% 0.80% 0.90%
4/2/2019 Cap Goods Ship Nondef Ex Air -0.10% 0.00% 0.80% 1.00%
4/2/2019 Wards Total Vehicle Sales 16.80m 17.50m 16.56m
4/3/2019 MBA Mortgage Applications 18.60% 8.90%
4/3/2019 ADP Employment Change 175k 129k 183k 197k
4/3/2019 Markit US Services PMI 54.8 55.3 54.8
4/3/2019 Markit US Composite PMI 54.6 54.3
4/3/2019 ISM Non-Manufacturing Index 58 56.1 59.7
4/4/2019 Challenger Job Cuts YoY 117.20%
4/4/2019 Initial Jobless Claims 215k 211k
4/4/2019 Continuing Claims 1750k 1756k
4/4/2019 Bloomberg Consumer Comfort 60
4/5/2019 Change in Nonfarm Payrolls 179k 20k
4/5/2019 Two-Month Payroll Net Revision
4/5/2019 Change in Private Payrolls 178k 25k
4/5/2019 Change in Manufact. Payrolls 10k 4k
4/5/2019 Unemployment Rate 3.80% 3.80%
4/5/2019 Average Hourly Earnings MoM 0.30% 0.40%
4/5/2019 Average Hourly Earnings YoY 3.40% 3.40%
4/5/2019 Average Weekly Hours All Employees 34.5 34.4
4/5/2019 Labor Force Participation Rate 63.20%
4/5/2019 Underemployment Rate 7.30%
4/5/2019 Consumer Credit $17.000b $17.049b