If You Don’t Like the Headlines, Just Wait a Day

Yesterday’s reported deterioration in trade negotiations with China is now being reported as almost a done deal. Bloomberg News has reported that that a Phase One agreement is “near.” Bloomberg didn’t say how near nor was there a mention of the source of the new news.

Doesn’t matter; news is news, right or wrong, and today’s news has reversed yesterday’s market behavior. The DJIA is up by triple-digits while the price of a Ten-Year Treasury note has slipped by about a half-point. Ten-Year yields are up to around 1.77%; up from around 1.70%.

While headlines continue to grab most of the headlines, economic fundamentals still exist. We learned this morning from the ISM that its non-manufacturing (services) Index slipped to 53.9 from 54.7. It was “supposed” to stay about the same. Levels above “50” are still indicative of expansion, but the downward trend in this measurement is not encouraging in light of even greater retrenchment in the ISM PMI indices. Also, some consider the ADP Employment Change report to be a harbinger of the monthly BLS report and if they’re right, this Friday’s Jobs Report might not be much fun. The ADP expected November’s job creation to produce 135k new positions but instead, the number was only half of that. Early market surveys suggest an expectation of 185k new jobs to be reported by the BLS come Friday.