Thoughts on the latest ISM Services & Powell's hawkish lean
Anyone else tracking the latest ISM Services data today? The uptick, especially on the prices paid component, felt a bit jarring after some of the earlier manufacturing prints. It's making me re-evaluate my short-term outlook on a few rate-sensitive sectors. Powell's tone in the past few weeks has been consistently hawkish, and this latest data point just gives the Fed more ammo, it feels like. I'm starting to lean towards the idea that any significant rate cuts are further out than many initially hoped for, pushing the 'higher for longer' narrative even more. I'm particularly watching how this plays out in the regional banks and some of the higher-growth tech names that are more reliant on lower borrowing costs. Might need to trim some of those on strength if the narrative solidifies. Also, with $EURUSD still hovering around 1.195, a stronger dollar scenario on sustained hawkishness could add another layer of complexity for multinationals. What are others thinking about the implications for US equities in the coming weeks?
That ISM services print was definitely higher than expected, especially the prices paid. It's tough to see how the Fed backs off their hawkish stance with data like that. I'm wondering if this pushes out the pivot further than most anticipate.