Early on futures were lower as investors realized that yesterday didn’t change things too much: All major indices were still below falling 50 day averages, and it was only a 49% up day. The overall trend remained to the downside, and investors remained wary of a recession, pricing for this expected environment. Then this morning’s data positively surprised, with Services PMI coming in higher than the preliminary numbers, while ISM came in higher than expectations. This helped move FOMC July estimates back above 90% for a 75bps hike, from yesterday’s 84%. It seems so far that the economy can handle higher rates.
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