Service Sector Expands For 14th Consecutive Month, Contrasts With Largest Factory Order Reduction Since April 2020: Tuesday's Economic Digest
Portfolio Pulse from Piero Cingari
Economic data revealed a mixed U.S. economic outlook with the service sector expanding for the 14th consecutive month, despite a slight decrease in the ISM Services PMI to 52.6%. Conversely, factory orders in January 2024 saw a significant drop of 3.6%, the largest since April 2020. The decrease in U.S. Treasury yields and a rise in rate cut expectations influenced market reactions, with bonds and gold outperforming stocks. The iShares 20+ Year Treasury Bond ETF (TLT) rallied 1.4%, while the SPDR S&P 500 ETF Trust (SPY) and the Invesco QQQ Trust (QQQ) fell 0.9% and 1.9% respectively.
March 05, 2024 | 3:53 pm
News sentiment analysis
Sort by:
Ascending
NEGATIVE IMPACT
The Invesco QQQ Trust (QQQ) experienced a 1.9% drop, reflecting a negative short-term impact from the economic data.
QQQ's decline is influenced by the same factors affecting SPY, with the added impact of being tech-heavy, which may have heightened its sensitivity to economic uncertainties.
CONFIDENCE 85
IMPORTANCE 80
RELEVANCE 90
NEGATIVE IMPACT
The SPDR S&P 500 ETF Trust (SPY) fell 0.9% in response to the economic data, indicating a negative short-term impact.
The decline in SPY is a reaction to the mixed economic signals, with investors shifting towards bonds, as indicated by the performance of TLT.
CONFIDENCE 85
IMPORTANCE 80
RELEVANCE 90
POSITIVE IMPACT
The iShares 20+ Year Treasury Bond ETF (TLT) rallied 1.4% following the economic data release, indicating a positive short-term impact.
The rally in TLT is directly attributed to the decrease in U.S. Treasury yields and increased expectations for Federal Reserve interest rate cuts, making bonds more attractive.
CONFIDENCE 85
IMPORTANCE 80
RELEVANCE 90