Happy Valentine’s Day!
Stocks and Bonds are both lower so far this morning.
Industrial Production and Capacity Utilization were both reported lower than expectations. Capacity Utilization came in at 78.5%, which was lower than the 79.3% expected. Additionally, last month’s figure was revised lower from 79.2% to 78.9%. As we have discussed, Capacity Utilization is an important indicator for general economic health and inflation. Excess Capacity in factories relieves upward price pressures, and indicates that demand may not be as robust. Both of these are helpful for Bonds. Bonds go up, mortgage rates go down.