May 1, 2018
Longer delivery times and rising input costs are the latest signs of stress coming from ISM's manufacturing sample which also continues to report disruptions tied to metal tariffs. Consumer spending, unlike most factory data, has been soft though today's vehicle sales data are mostly positive, coming in at a strong 17.2 million annual pace in April which however is slightly below March. Stocks were mixed with the Nasdaq posting a sharp 0.9 percent gain to 7,130 but the Dow a 0.3 percent loss to 24,099.
Treasury yields inched higher with the 2-year now at 2.5 percent and the 10-year, at 2.97 percent, still near 3.0 percent. Tomorrow's FOMC meeting is not expected to produce a rate hike but the committee's description of inflation could take a hawkish turn following Monday's rise in the PCE price indexes. The dollar continues to benefit from weakness in the euro as Europe's economic pace appears to be slowing. The dollar index rose a sharp 0.7 percent on the day to 92.47.