April 18, 2017
Housing and manufacturing cooled off in March raising further doubt over the strength of the first quarter. Housing starts fell sharply last month with permits for single-family homes also down. Utility production did post a monthly record following February's warmth, but the manufacturing component posted a sharp decline.
Weak data aren't raising the ante for rate hikes which is a plus for bonds. Also raising demand for bonds are heightened tensions in Korea and uncertainty over Sunday's election in France. The 10-year yield, which fell very sharply last week, tightened by another 4 basis points to 2.18 percent. Lower yields are often a negative for the dollar which fell a sharp 0.8 percent to 99.52 on the dollar index. Money moved out of stocks as the Dow fell 0.6 percent to 20,523 to reverse much of Monday's 0.9 percent gain.