Better-than-expected economic data in the United States this morning have lifted stocks to new all-time highs as Treasuries slide, sending yields racing higher.
The S&P 500 index is trading up 0.5% at 1862, a new intraday record high. 10-year U.S. Treasury futures, meanwhile, are 0.4% lower, and the yield on the 10-year note is 2.69%, 5 basis points below Thursday’s close.
ISM-Chicago’s monthly Chicago Business Barometer unexpectedly rose to 59.8 in February from January’s 59.6 reading, indicating an acceleration in the pace of expansion in manufacturing activity in the states of Illinois, Indiana, and Michigan over the past month. Economists expected the the index to fall to 56.4.
Notably, the report’s employment sub-index surged to 59.3 from 48.2, indicating a marked acceleration in the pace of hiring in Midwest manufacturing following January’s decline.
The final results of the University of Michigan’s February consumer confidence survey, meanwhile, revealed an unexpected increase in confidence this month, providing further momentum for risk sentiment.
Also out this morning were revisions to fourth quarter U.S. GDP data — which were worse than expected but contained positive elements — and January pending home sales data, which missed expectations but will likely be explained away as weighed down by to transitory weather effects.
The charts below show action in various markets this morning. Across the top from left to right are the S&P 500, the U.S. dollar-Japanese yen exchange rate, and the euro-U.S. dollar exchange rate. Across the bottom are gold futures, 10-year U.S. Treasury futures, and December 2016 eurodollar futures.