GOOD MORNING! The markets’ initial risk-off mood turned into risk-on trade after upside surprises in manufacturing surveys. Both the manufacturing Purchasing Managers Indexes (PMIs) from the S&P Global Group and the Institute for Supply Management (ISM) revealed expansion in the sector. Strong new orders, a rising backlog of orders and low customer inventories revealed momentum and the headline ISM index posted it highest level since August 2022. The text with the release contained comments that were somewhat downbeat with uncertainty on tariff and trade policy, which leaked into stagnant employment. Pressure on bonds also came from a $25 billion 8-part corporate bond offering for Oracle. Bloomberg is reporting that the issue had a record order book of $129 billion. Stocks surged and Treasuries gave up their gains on the reports. They were also supported by reports that the US and Iran were in talks, which eased some of the geo-political tensions but weighed on oil prices and a trade deal with India. In other news, Dip buyers showed up in the precious metals market and Punxsutawny Phil, the weather prognosticating groundhog, saw his shadow and predicting six more weeks of winter. And, the partial government shutdown included the Labor Department, which houses the Bureau of Labor Statistics (Mark Twain, “Lies, damn lies and statistics.”) that will delay today’s JOLTS report and Friday’s employment report.

     With the scheduled JOLTS report being delayed the only items on today’s calendar is a couple of Fed speakers and an auction for $90 billion 6-week T-bills. Stock index futures are mixed with tech stocks being favored again and Treasury yields are slightly higher to start the day.