Markets for long-term credit this week dodged not one bullet but an entire volley.
The 10-year Treasury note has been expected to rise through 4 percent and take mortgages toward 6 percent. Instead, the 10-year T-note slid to 3.4 percent and held in the 3.5 percent range in the face of strong economic reports.
The bullets … the first week each month brings flash news about the prior month, and the most definitive data. The Institute for Supply Management surveys of manufacturing and services both outperformed in February at extraordinary levels: 61.4 and 59.7, respectively, which are multiyear highs associated with U.S. Gross Domestic Product growing 5 percent to 8 percent.
The slippery aspect: They measure only better or worse from respondents, blind to how much better. No question: The manufacturing side is hot because pent-up demand for autos released, boosting that sector 27 percent above February last year. The darned things do wear out, and we do get tired of them.