The market was greeted with a slew of economic data this morning, some too hot, some too cold, and some just right.
Weekly Unemployment Claims filled the too cold category as the rose 24K, much higher than analysts had expected. The plus 484K reading is the highest level seen since the snowstorms in late February. Blame has been laid on Easter and Cesar Chavez day. Wonder what will happen to next week’s numbers since April 20th is National Cuckoo day.
The New York State Empire Manufacturing Index was also released, up 9 points to 31.86. The print above 30 has happened only twice in the last four years. Looks like manufacturing is getting better in the big apple, switching from a draw down in inventories to a rebuild. Let’s see if its sustainable. Industrial Production for March hit the screen up only .1% as utility output fell sharply but was countered by strong mining and manufacturing. The index continues to point out that we still have plenty of slack in the economy.
Batting cleanup today was the Philly Fed Survey which rose 1.3 points to 20.2. The index was mixed as new orders were up over 4 points but shipments dropped 8 points. The numbers were disappointing, a bit of a head scratcher when you look at the divergence between Philly and NYC.
Bond, note, and mortgage back pricing has been a game of crack the whip, initially dipping on the Empire news, making a comeback on Weekly Unemployment Claims, only to dip again on the Philly Fed news. Currently, we’re on the comeback trail as the market has rallied for no particular reason. After being down as much as 6/32’s this morning (MBS), the market is back to unchanged. With cross currents and divergences a plenty, the tactical bias is to stay defensive on the market. Traders look to sell strength but also buy weakness as we see the range (10 year note) between 3.82% and 3.92%.
Happy tax day!