Updated on May 2, 2016 10:35:08 AM EDT
The Institute for Supply Management (ISM) opened the week’s calendar of events late this morning with the release of their April manufacturing index. It came in at 50.8, falling short of the 51.4 that was expected and down from March’s 51.8. This means fewer surveyed manufacturers felt business improved last month than did in March. That is good news for the bond and mortgage markets because it points to a softening manufacturing sector. However, a secondary reading that tracks prices paid rose much higher than expected, to its highest level since September 2014. The jump raises concern about inflationary pressures that make bonds less attractive to investors. Therefore, we are seeing a negative reaction to the news instead of a positive move.