Dallas Fed Manufacturing Index Sees Improvement to -11.3, Falls Short of Analyst Projections

Highlights

• The Dallas Federal Reserve's Manufacturing Index rose from -27.4 in January to -11.3 in February.
• The New Orders Index saw a positive change from -12.5 in January to +5.2 in February.
• In January, New Home Sales experienced a 1.5% increase compared to the previous month.  

On February 26, the Federal Reserve Bank of Dallas published the Dallas Fed Manufacturing Index report, which revealed an improvement in the index from -27.4 in January to -11.3 in February, falling short of the analyst consensus of -8.

The Texas Manufacturing Outlook Survey demonstrated overall improvement in the manufacturing sector, as most business indicators indicated positive changes.

The New Orders Index saw a notable increase from -12.5 in January to 5.2 in February, marking its first positive reading since May 2022. Additionally, Capacity Utilization improved from -14.9 to -1.0, while the Production Index rose from -15.4 to 1.0.

The New Home Sales report for January revealed a 1.5% month-over-month increase, which surpassed the analyst consensus of +0.9%.

Following the release of the Dallas Fed Manufacturing Index report, the U.S. Dollar Index stabilized near the 103.80 level, while Treasury yields rose. Despite this, forex traders seemed unfazed by the yield increase.

Gold prices retreated below the $2030 level as traders shifted their focus to the climbing Treasury yields, overlooking the pullback in the U.S. dollar. It appears that additional catalysts are needed to drive the gold markets higher.

The S&P 500 index remained stagnant near the 5090 level as traders geared up for a potential test of the 5100 level. The performance of tech stocks continues to play a pivotal role in driving the S&P 500 and other major indices. Economic reports have not elicited strong reactions from the stock market, with trader focus remaining on tech stocks.