Daily Market Color

Rates Rise on Strong Manufacturing Data and Home Sales

Rates and equities rise following strong economic data releases
Markets celebrated today’s strong manufacturing and home sales data, looking past rising virus cases and the potential capital-gains tax hike.  Equity indices closed in the green – the S&P 500 and DJIA rose 1.1% and 0.7%, respectively.  Treasury yields and swap rates rose 1-3 bps across the curve – the 10-year closed 2 bps higher at 1.55%.
Composite PMI rose to a record high in March
Composite PMI beat expectations and rose from 59.7 to 62.2 last month, hitting a record high for the second consecutive month.  Manufacturing activity accelerated despite supply chain disruptions resulting from rising input costs.  Prices paid by manufacturers have risen to the highest level since July 2008, causing a buildup in uncompleted work and capping growth.  The service sector was fueled by strong demand and the loosening of COVID-19 restrictions on businesses.
Sales of new homes jumped 20.7% last month
Despite supply challenges due to record lumber prices, new home sales rose to 1.021 million last month to the highest level since 2006, blowing past expectations. 

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