Texas factory activity continued to expand in January according to the Dallas Fed Manufacturing survey.  Several areas had slower growth in January; however, general business activity hit a 12-year high, +33.4 compared to +29.7% from last month, and exceeding the expectations of +25.4.

• Capacity Utilization: +14.5 vs. +26.3 in December
• New Orders: +25.5 vs. +30.1 in December
• Production +16.8 vs. +32.8 in December

The Texas Manufacturing Outlook survey cites, “Expectations regarding future business conditions were even more optimistic in January. The index of future general business activity rose four points to 44.5, its highest level since December 2004. The future company outlook index edged up to 43.2, also a relatively high level. Other indexes of future manufacturing activity pushed further into positive territory.”

The major indices are taking a break today, down between 0.3 and 0.4%.  Ten out of the eleven S&P500 sectors are in the red, with the lone bright spot being Consumer Discretionary.  Decliners far outpace advancers 2292/680 on the NYSE and 1719/1023 on the Nasdaq.

It is a busy week between the State of the Union tomorrow night, the FOMC policy directive release on Wednesday (the last under Janet Yellen), and then the Employment Report on Friday.  Not to mention the earnings releases this week from some big names such as Apple (AAPL) Alphabet (GOOGL), Boeing (BA), Facebook (BA), Microsoft (MSFT), to name a few. 

The 10-year note is currently trading around 2.7% and mortgage rates, which are hovering around 4.5%, are at the highest rate in over 4 years.   The dollar is up today against a basket of currencies and oil is moving lower. 

Let’s not force the issue this afternoon.