February 1, 2018
Construction spending, driven by housing, ended last year on a solid note while the ISM's manufacturing sample starts of the new year with exceptional strength. And jobless claims are steady and low going into tomorrow's employment report which points to another month of solid payroll gains and a low unemployment rate. But a negative in the day is a sharp fall in unit auto sales during January, at least based on preliminary data which showed unexpected weakness.
Attention in the market may be focusing on Fed policy which, unlike tax policy, is set to become less stimulative for the economy. Part of the reason for the caution is tied to inflation underscored today by a more than $1 lift in oil to $66. Stocks were mixed Thursday though the Dow did post a 0.1 percent gain to 26,166 to cut its weekly loss to 1.7 percent.
In another indication of new Fed focus, interest rates have been inching higher, to 2.78 percent for the 10-year Treasury which is up 5 basis points on the day and up 12 basis points on the week. Higher rates often lift the dollar but the dollar hasn't been responding, down 0.6 percent today on the dollar index to 88.57.