The first week of 2012 is a busy one for economic data, so let’s get right too it.
Construction Spending surged in November by 1.2%, however, October was drastically revised down to -0.2% from +0.8%. so no real gains here.
The Institute for Supply Management’s manufacturing index rose to 53.9 from 52.7, a stronger number than what was expected. The employment component rose to 55.1 from 51.8 while new orders rose to 56.6 from 56.7. These are two “forward-looking” components that are reflecting a continuation of moderate growth in manufacturing.
The last trading day of 2011 saw “risk-off” trade into U.S. Treasuries on light, holiday volume. Today that trade is reversed with stocks rocketing higher and bonds taking it on the chin. Given the so-so economic data the market reaction seems overdone. Mortgage prices are worse by .375%.
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