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 TimeEventSurveyActualPriorRevised
4/1/2019Retail Sales Advance MoM0.20%-0.20%0.20%0.70%
4/1/2019Retail Sales Ex Auto MoM0.30%-0.40%0.90%1.40%
4/1/2019Retail Sales Ex Auto and Gas0.30%-0.60%1.20%1.70%
4/1/2019Retail Sales Control Group0.30%-0.20%1.10%1.70%
4/1/2019Markit US Manufacturing PMI52.552.452.5
4/1/2019ISM Manufacturing54.555.354.2
4/1/2019ISM Employment57.552.3
4/1/2019ISM Prices Paid52.554.349.4
4/1/2019ISM New Orders57.455.5
4/1/2019Construction Spending MoM-0.20%1.00%1.30%2.50%
4/1/2019Business Inventories0.50%0.80%0.60%0.80%
4/2/2019Durable Goods Orders-1.80%-1.60%0.30%0.10%
4/2/2019Durables Ex Transportation0.10%0.10%-0.20%-0.10%
4/2/2019Cap Goods Orders Nondef Ex Air0.10%-0.10%0.80%0.90%
4/2/2019Cap Goods Ship Nondef Ex Air-0.10%0.00%0.80%1.00%
4/2/2019Wards Total Vehicle Sales16.80m17.50m16.56m
4/3/2019MBA Mortgage Applications18.60%8.90%
4/3/2019ADP Employment Change175k129k183k197k
4/3/2019Markit US Services PMI54.855.354.8
4/3/2019Markit US Composite PMI54.654.3
4/3/2019ISM Non-Manufacturing Index5856.159.7
4/4/2019Challenger Job Cuts YoY117.20%
4/4/2019Initial Jobless Claims215k211k
4/4/2019Continuing Claims1750k1756k
4/4/2019Bloomberg Consumer Comfort60
4/5/2019Change in Nonfarm Payrolls179k20k
4/5/2019Two-Month Payroll Net Revision
4/5/2019Change in Private Payrolls178k25k
4/5/2019Change in Manufact. Payrolls10k4k
4/5/2019Unemployment Rate3.80%3.80%
4/5/2019Average Hourly Earnings MoM0.30%0.40%
4/5/2019Average Hourly Earnings YoY3.40%3.40%
4/5/2019Average Weekly Hours All Employees34.534.4
4/5/2019Labor Force Participation Rate63.20%
4/5/2019Underemployment Rate7.30%
4/5/2019Consumer Credit$17.000b$17.049b