Stocks are strongly higher today, following a decline on Monday and dismissing China’s latest covid policies tightening.
It’s a light day for economic releases with only the Richmond Fed Manufacturing and Services indexes reporting.
The manufacturing index showed continued softening with -9 for Nov, up from -10 the prior month. Of the 3 component indexes, shipments and employment deteriorated slightly and volume of new orders improved slightly.
Next, the services index remained soft in Nov but improved 6 points to -2. Of the 6 components, revenues, demand and local business conditions showed improvement, but remained negative. Capital expenditures, equipment and software spending, and services expenditures softened, but remained positive.
Last, but not least, FOMC member and Cleveland Fed President Loretta Mester spoke this morning. She said “we’re committed to using our tools to put inflation on a sustainable downward trajectory to 2%” and that the labor supply and demand is still out of balance, but did not comment on monetary policy outlook.
Treasury yields are lower, with the 2-year T yield down 1.5 basis points to 4.52%, the 5-year T yield down 6.9 basis points to 3.94% and the 10-year T yield down 5.2 basis points to 3.77%. Advance rates are higher out to 1-year and turn lower on terms greater than 1-year.