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ISM Manufacturing And Fed Minutes In Focus

Market futures are perking into the green again this morning, following triple-digit gains in the first trading session of 2018 yesterday in both the Dow and Nasdaq. Clearly, markets were determined to bid back up toward the record highs we’d seen in late 2017 before seasonal sell-offs drained a bit of the profits off the top. Part of how markets perform today will be data-reliant.

Our busy week of economic data gets started this morning after the opening bell with ISM Manufacturing data for the month of November at 10 am ET. Our last look saw a read of 58.2 (anything higher than 50 indicates growth in manufacturing overall), and analysts are looking for a somewhat in-line result this time around as well. Combined with Friday’s ISM Services figures expected this Friday, we will get some clear signals about the health of the U.S. economy in the 4th quarter of 2017.

Investors will also be paying attention to today’s release of Fed minutes at 2 pm ET from the latest meeting of the Federal Open Market Committee (FOMC) from December 12 and 13. These dates are key to what one might expect from the report — this was before the GOP tax overhaul passed through Congress the week before Christmas.

Currently, analysts expect three interest rate hikes in 2018, starting with the initial meeting helmed by incoming Fed Chair Jay Powell this March. In the next 10 weeks or so before this meeting occurs, we shall see if manifestations from the tax cut has worked their way into the economy to an extent that changes might be considered — raising rates a half-percent, for instance, to sop up any big initial increases in inflation metrics should they come about. We also will get our first look at Powell’s management style after four years of Fed Chair Janet Yellen.

Also expected today are Construction Spending results for November, as well as the latest Auto Sales figures. Kelly Blue Book analysis is looking for annualized auto sales in December of 17.6 million, up a tad from November’s 17.5 million total. General Motors GM, Ford F, Toyota TM, Honda HMC and others have attempted to heavily incentivize new auto sales, but overall trends are down over the past year, following sated pent-up demand that followed the Great Recession once the U.S. economy got back on track a few years ago.

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