Stocks dropped to a one week low as investors wait for more news to come forward concerning the U.S – China Trade negotiations. It is reported the U.S and China are in the final stages of completing a trade deal. A dispute between the enforcement of the deal is holding back progress.
Bond prices are down slightly, and the 10-year treasury is yielding 2.74%. We finally saw the release of Q4 GDP, December housing starts, and December personal income. This shows a trend that the U.S economy is slowing but still managing steady growth. Additionally, weak consumer spending and retail sales contributed to the slowdown. Today, we have three Fed speakers on tap, Rosengren, Kashkari and Barker.
The February ISM manufacturing index provided a rare bright spot for economic outlook. The February ISM reading, 54.2, was short of consensus expectation of 55.8. While some analysts will stress this is an alarming result, that is not the case. The result is still an encouraging signal for growth. ISM readings between 54.0-55.0 typically correlated with GDP growth near 2.4%. If current levels can hold, growth should remain at a pace that continues to drive unemployment lower and core inflation higher.