Good Monday AM

Construction Spending and ISM Index are the only economic reports today and they both missed expectations. The DOW is very weak (down 580 currently and sinking) due to China making changes to tariff treatment for more than 100 types of U.S. goods in reply to Mr. Trump’s ordering higher steel and aluminum import duties. Commodities are rallying on the higher priced goods. A trade war will not be good for anyone. Any economic disruption should be a gain for bonds as people will invest in safer assets (until inflation kicks in that is). Not unexpectedly, bonds are under a little pressure today with funds getting back to investing instead of the rebalancing from last week. Still the 10-yr is at 2.74% (I like it and will like it more below 2.72%) and mortgage bonds are -8bps on the day (this would be worse if stocks were performing better).  No economic data tomorrow but Wednesday – Friday is more active with Friday bringing the BLS jobs report. I would like see how the market plays out today and tomorrow before committing to a lock strategy.

Saturday night the Las Vegas Golden Knights clinched Home Ice for the Pacific Division…. #GoKnightsGo

Make today great!