Thoughts on the latest ISM Services & implications for Fed talk
The ISM Services print this morning was a bit of a head-scratcher, coming in softer than expected. For a while now, the market's been somewhat resilient, almost shrugging off the higher-for-longer narrative, particularly with that robust jobs data. But seeing the services sector, which has been a pillar of strength, show some signs of slowing definitely has me thinking about the Fed's next moves. It feels like this puts them in a slightly trickier spot, potentially easing the pressure for another hike soon, but not enough to signal cuts either. My watchlist is really keyed into the growth-sensitive names; if we start seeing a broader softening, even without a full-blown recession, those valuations could get squeezed. Also keeping an eye on how this plays into the dollar strength, given the $ZARUSD is already showing a bit of weakness today. Anyone else shifting their focus with this data point?
I agree, the ISM Services data definitely throws a wrench into the 'higher-for-longer' narrative, especially given how strong services have been. It makes you wonder if this is the start of broader economic cooling, or just a temporary blip. Will be interesting to see how the Fed interprets this in their upcoming statements.