Historically Poor Manufacturing Number Driving Stocks LowerPosted 10/02/2019 10:43AM CT |
Looking back, treasuries were sharply lower yesterday before the ISM Manufacturing number came out and changed everything. We saw the lowest reading in the last 10-years, yields plummeted, and stocks broke. Many pundits are blaming the ongoing trade war for the historically low number. Obviously, POTUS tweeted afterwards that it was the Feds fault as he has done seemingly every time a bad economic number has come out. Trump continues to bully the fed and wants them to lower rates even though many of the economic numbers have continued to be strong, aside from yesterday’s disaster. One stat that Trump should pay attention to is the two Fed rate cuts that we’ve seen this year and how both resulted in selloffs in the stocks. My point is, when rates have been cut, the stock market has sold off, so Trump should be wary about pressuring the Fed to lower rates. Looking ahead in the week, we have the monthly employment report which comes out on Friday at 7:30 AM. The street is looking for 140k. So, traders should be on guard and my guess is that if we see a weak number, stocks will fall initially, but will put pressure on the Fed to be more aggressive in cutting rates. A strong number should see a pop in stocks.