Once again, the economic data reports were dominated by shifting trade policy perceptions, but this time things were flipped. It was the Chinese indicating a possible rollback of tariffs on both sides, sending the stock market higher. However, that was refuted by the White House the next day.

The ISM Non-Manufacturing improved in October, consistent with moderate growth in the overall economy in the near term. Unit motor vehicle sales fell in October. Productivity figures were poor (these data are quirky, but the underlying trend is disappointing, especially in manufacturing). The UM Consumer Sentiment Index was little changed. Consumers remain optimistic about the job market, while the impact of the impeachment inquiry is “virtually nonexistent” according to the report.

Next week, Fed Chairman Powell will testify twice on Capitol Hill, although his evaluation of the economic outlook is not expected to deviate much from what he said in his post-FOMC press conference. Moreover, said testimony will be overshadowed as the impeachment inquiry enters a more public phase. The important economic data will arrive on Friday. Retail sales are expected to be mixed and industrial production should further reflect the GM strike. In the Consumer Price Index (Wednesday), a modest increase in gasoline prices will be amplified by the seasonal adjustment (which anticipates lower gasoline prices in October). Core inflation should remain moderate.