It’s a good news type of day for data in the US.
An hour and a half after the January jobs report blew through estimates on the headline while betraying cooler-than-expected MoM wage growth (so, “Goldilocks”, if you’re into tired, old market memes), ISM manufacturing also printed well ahead of consensus at 56.6 versus an estimate of 54.
Make no mistake: This is relief for markets.
Recall that December’s 54.1 print was seen as a particularly heinous economic crime given that it represented the largest MoM drop since October 2008. It was revised up to 54.3.
Meanwhile, new orders jumped to 58.2, the largest increase since 2014.
On the downside, new export orders fell to the lowest since 2016, in a sign that trade tensions are biting – or something.
In any event, you can absolutely expect everyone to take this as evidence that the US economy isn’t falling off a cliff after all – especially in light of the jobs report.
When you throw in the Fed’s dovish relent, it looks like the only remaining obstacles to a sustained rebound in risk assets are Donald Trump’s “greatest” tariffs and that same Donald Trump’s “tremendous” border barrier battle.
On the latter, he’s gone out of his way this week to pound the table on the idea that he can and will shut down the government again in two weeks.
And when we say “pound the table”, we mean that literally…