There is a growing debate over soft and hard data. And while it is true that surveys don’t always have to materialize into actions, for the most part, there is a solid historical connection.  And there are various types of surveys that are based on facts rather than opinions, such as regional manufacturing reports from the Federal Reserve and the Institute for Supply Management (ISM).

Yesterday, the Chicago Purchasing Index (PMI) surged 7.1 points that lifted the overall level to 57.4, the highest since January 2015, as four of five components were higher. 

• New orders climbed 10.1 points
• Productivity +4.3 points to a 13-month high
• Employment improved to its highest point since October 2014.

Global Growth and Demand

Iron ore is a good proxy for the global economy, and it’s been on fire since November of last year; still, it is a long way from recent record highs…and lows.

In addition, iron ore reached an all-time high of 191.1 in February 2011 and then proceeded to plummet to an all-time low of 37.0 in December 2015.  The current rally was driven by improving the economy in Brazil, a strong demand from China, and inventory building in the United States.

Cracking the Whip on Animal Spirits

Don’t look now, but the  March rate hike is “live” again after William Dudley spoke about the rise of the stock market, the economy growing at “an above-trend pace, sturdy job gains, and inflation to drift higher."

Dudley, the New York Fed president, might just be trying to soften the eventual blow, but the Street is taking him seriously as a would-be March interest hike, heretofore, was written off as highly improbable. It is now 62%, according to the CME Group, and more than a 70% chance by other measures.

Target Rate (bps)	Current Probability %	Previous Day Probability %
50-75	38.0	69.0
75-100	62.0	31.0

I am not sure this news is what derailed the Dow Jones rally, which was on the cusp of making history as there have never been 13 all-time highs in a row. Still, it’s been a pretty cool run, right?

It’s not over, but it was due for a pause. 

Today’s Session

President Trump hit a homerun last night, and its reverberating in the market this morning.  While we were told to expect more details on some key issues, the fact is, the resolve continues to be there as this speech was aimed as much to fellow Republicans as the American people.

This looks like the priorities and check list:

• Obamacare
• The Wall
• Infrastructure
• Tax Policy
• Trade

On trade, there was no talk of a border adjustment tax; although, by focusing on import hurdles in other countries, it’s clear the White House has to step up with something that “levels the playing field.” 

The Harley example is compelling considering how popular the motorcycle is around the world- 2016 was best sales year ever for Asia-Pacific and Europe/Middle East/Africa.  It’s not just taxes and tariffs that create hurdles for American exports (this is a perfect time to fix this), but without the populist notion, there is unlimited growth potential in isolationism. 

HOG 2016	US	OUS
Retail Units	161,658 -3.9%	96,3867 +2.3%
Shipments	161,839 -5.2%	100,382 +4.9%

I’m opposed to making Americans pay more for products, but I think we must push hard to open markets around the world.

I would love to see America ditch the repatriation tax, and we need trade agreements, so let’s hustle with those bilateral agreements.

My Favorite Moment Of President Trump's Address: We are blessed to be joined tonight by Carryn Owens, the widow of U.S. Navy special operator, Senior Chief William 'Ryan' Owens. Ryan died as he lived, a warrior and a hero, battling against terrorism and securing our nation. I just spoke to our great General Mattis just now who reconfirmed that, and I quote, 'Ryan was a part of a highly successful raid that generated large amounts of vital intelligence that will lead to many more victories in the future against our enemy.' Ryan's legacy is etched into eternity. Thank you. And Ryan is looking down right now. You know that. And he's very happy, because I think he just broke a record.  For as the Bible teaches us, there is no greater act of love than to lay down one's life for one's friends. Ryan laid down his life for his friends, for his country and for our freedom. And we will never forget Ryan." President Donald Trump Question of the Week What was your favorite part of President Trump’s address to Joint Session of Congress?

 

 

Comments

"America will be Great again" Bob on 3/1/2017 9:27:18 AM

I loved it when President Trump said "Set free the dreams of our people ". He didn't separate us or telll us what we should be dreaming or doing . He wants us to be free to dream and make them come true without unreasonable limitations. Celeste Tabriz-Freedman on 3/1/2017 9:31:53 AM

No question this was the high point of the night. You could see in his wife's face that she was lifting her heart to God and to her hero husband. The low point was the stupid democrats sitting on their hands for most of the speech. As an ex-Democrat, I'm proud of the fact that I left the party the moment the Clintons showed up in 1992. This is the Kamikaze party, now on their own suicide mission. I don't think they will make it back to power for another 30 years or more. Nail that to your wall. Dennis Howard on 3/1/2017 10:17:48 AM

Same John King on 3/1/2017 10:18:54 AM

"...we all bleed the same blood, we all salute the same flag, and we are all created by the same God." Francine Paino on 3/1/2017 10:19:23 AM

Warfighters will always win Day or Night Ramon Espinosa on 3/1/2017 10:41:30 AM

Question: If we cut taxes by 15 to 20% and only have a border tax of say 5% won't the retailers still be ahead??? D. Hays on 3/1/2017 10:44:04 AM

Done well Charles Ramon Espinosa on 3/1/2017 10:48:14 AM

Clearly, the Owens tribute galvanized all Americans, and, if just for a moment, illustrated to the world who we are as a culture and a people: one Nation under God! Donald Nadeau on 3/1/2017 10:48:52 AM

Too many animal spirit moments in his speech; but, if you've traded with your head, with a strategy, instead of your emotions, you've done well in this rally. Charles, you've done a good job in leading the charge. Keep it up. Bob Waddell on 3/1/2017 10:51:13 AM

Initially, my favorite part of the speech was the overall unity of purpose expressed through the middle of the speech. Mr. Trump reiterated the essentials of the Obama professed platform: access to quality education, universal healthcare, public safety, and equal rights. But, as I watched closely, I was especially gripped not by what he said, but by the exposed hypocrisy of the fascist feminist caucus on the Demoncrat side of the room. almost all refused to support the idea of universal healthcare. Almost all refused to support quality education opportunity for all. About half refused to show support for the police, which was amazing since they believe in using force to make citizens conform to their ideals after they pass laws. About 20% refused to participate in the 1-1/2 minute ovation for Chief Owens. My favorite part was the revelation of the traitorous hypocrisy of these women who seem to be there only for a power trip for themselves despite their false rhetoric of wanting to help the people. And second was the revelation of the media bias as they tried to minimize showing how this group behaved dishonorably. (The public TV coverage included post comments by 3 radical leftists and one moderate leftist, but no true moderates or conservatives). Bob G on 3/1/2017 11:03:48 AM

Exactly there same!! Karl on 3/1/2017 11:27:51 AM

D. Hays, yes would be the case. The idea here is to make US manufacturers more competitive and to make other countries lower their import taxes on our goods. Ever since the government got their hands into the people's pockets as to their wages, they have been draining us of our ability to make our dreams come true. Looking at Article 1, congress is supposed to tax imports and that is the way that we ran our government until the development of the income tax back 1916. Even at that time the top bracket was only 7% and no one that worked for any type of wage paid any. Bracket creep and inflation has made it possible for them to get into our pockets. Joseph Steiner on 3/1/2017 12:20:55 PM

I loved it when President Trump proclaimed he was in Washington to be President of the United States, not the world! Janet on 3/1/2017 12:25:22 PM

The Owens tribute was unforgettable. NOW it's time for Republicans to get behind the President and get his agenda through. The only way out of our economic mess is 3% or more growth. stephen locke on 3/1/2017 12:57:25 PM

When the camera showed the Dems sitting on their hands despite sincerity from the president. Phil s on 3/1/2017 2:20:17 PM

Even when A President talks about good things for ALL people and doesn't segment us by race, creed, economic status or any ideological construct the Democrats cannot bring themselves to agree that compromise and unity are what has allowed the USA to prosper for over going on 250 years. That Party has become a negative based entity that is only interested in their way and their power; not what's best for all of America. It really is amazing how far afield they have moved in just 2 decades! Garro on 3/1/2017 6:04:07 PM

Absolutely the best part of address was the tribute. Yet the whole of it was wonderful. How many services remind you of what you got. But how they will fulfill they're promises they made. All with love of country and it's people. Thank You President Trump. Roy Orem on 3/2/2017 9:53:48 AM

I thought the entire speech was uplifting and fabulous. I have waited years to hear our president show compassion for our beloved America. Mary Ann Glueckert on 3/3/2017 6:46:47 PM

Tweet

 

Home | Products & Services | Education | In The Media | Help | About Us | Disclaimer | Privacy Policy | Terms of Use | All Rights Reserved.