"Manufacturing Is Far From Booming" - PMI Drops Despite Surge In ISM New Orders

With real spending declining and core durables goods orders and shipments fading, it's perhaps not a surprise that Markit PMI Manufacturing turned lower in Feb to 54.2 (missing expectations) with their chief economist warning "manufacturing is far from booming." Of course, just as with China, ISM provided an opposite perspective on US Manufacturing, beating expectations and rising to Aug 2014 highs.

Dow 21,000

Well that escalated quickly...

Wall Street Scrambles To Change The Trump Narrative Again

Until yesterday, the prevailing Wall Street consensus was that in the absence of specifics from President Trump on his economic and fiscal plans, the market would be disappointed, and proceed to slide. It did not, in fact quite the opposite.  As a result, the world's best paid strategist have once again revised the Trump-related narrative.

How We Got Here In One Sentence

In every annual budget debate since the 1980s, one side figures out that the way to get what it wants – which is higher spending – is to frame the request in a particular, ingenious way: We have to borrow and spend way more now if we want to borrow and spend way less later.

Real Personal Spending Crashes Most Since 2009

While the key number analysts were looking for in today's Personal Spending data was the PCE Price Index, both headline and core, which rose by 1.9% and 1.7% respectively, just shy of the Fed's 2.0% inflation target, the internals on US incomes and spending were just as notable. 

"Trump Makes America Wait Again" - Why Not Everyone Was Happy With Trump's Address

"Financial bubbles, most notably the dotcom era, have proven that hopes and dreams can keep the market irrational longer than most of us can remain solvent. At some point though, reality catches up. And 40 days in to Trump’s administration, there’s little sign that Trump will deliver much of a boost to the U.S. economy on any imminent horizon."

30Y Yields Tops 3% As March Rate Hike Odds Spike Above 80%

An avalanche of hawkish Fed speakers appear to have got their way as March rate-hike odds have extended yesterday's move to 82% this morning. As stocks soar after a more presidential Trump, bond yields are also rising, catching up to stocks after diverging for two weeks.

German Inflation Jumps 2.2%, Surpassing ECB Target And Highest Since 2012

Following a series of "hot" inflation prints from Germany's states, moments ago German inflation rose more than expected, printing at 2.2% above the 2.1% consensus estimate, up from 1.9% in January and surpassing the ECB's target of a rate just under 2 percent for the first time since August 2012, the peak of the Eurozone debt crisis.

Frontrunning: March 1

  • Stocks Jump as Investors Eye March Rate Increase, Trump Speech (WSJ)
  • A softer side of Trump (Reuters)
  • Trump’s Softer Tone Masks Hard Road Ahead for Agenda in Congress (BBG)
  • President Asks Lawmakers to Unite Behind His Agenda (WSJ)
  • Left Out of Trump's Big Speech, Russia Wonders What It Means (BBG)
  • EU to Reject Trump's Protectionism at Summit, Draft Shows (BBG)

BofA Throws In The Cautionary Towel: Raises S&P Price Target From 2,300 To 2,450

Overnight, Bank of America's Savita Subramanyan became the first sellside strategist in recent weeks to throw in the cautionary towel, and raised the bank's year-end S&P price target from 2,300 to 2,450 to "reflect an increasing likelihood that we are entering the typical later stages of a bull market, during which fundamentals typically take a back seat to sentiment and technicals."

Global Stocks, US Futures Surge, Bonds Tumble On "Presidential" Trump Speech, Hawkish Fed Speakers

The dollar and U.S. Treasury yields jumped on Wednesday, while global stocks and S&P futures rose as investors gave generally favorable marks to President Donald Trump's first speech to Congress, while paying more attention to the sudden onslaught of Fed hawks who repriced March Fed hike odds from 50% to 80% in a single afternoon. Strong economic data from China and Europe helped propell global risk assets higher.

Wall Street Analysts React To Trump's "Presidential, Low On Details" Address

In his much anticipated address to Congress that was widely described as "presidential" avoiding attacks on the media and Democrat opponents, even if once again thin on detail, President Donald Trump reaffirmed his pledge on infrastructure, defense spending and tax overhaul, in broad brush strokes. Here is what a selection of Wall Street analysts thought about Trump's speech.

Russia, UAE Sign Breakthrough Military Deal

The United Arab Emirates (UAE) has signed an outline agreement to buy Russian aircraft. It also plans to implement a joint project with Russia to develop a next-generation fighter that could enter service in seven or eight years.