By Joseph Adinolfi, MarketWatch

Durable-goods survey data disappoint

Treasury yields were little-changed on Friday as President Donald Trump headed for a showdown with recalcitrant congressional Republicans who've balked at his proposal to repeal and replace Obamacare.

The yield on the 10-year Treasury note was off about half a basis point at 2.418%, while the yield on the two-year note rose by the same amount to 1.261%. The yield on the 30-year bond was down one basis point at 3.026%. Bond yields move inversely to prices.

Congressional Republicans delayed a vote on the health-care bill scheduled for Thursday night after the White House and House Freedom Caucus failed to reach a compromise.

Trump delivered an ultimatum to congressional Republicans late Thursday, saying they could either pass his bill as-is on Friday, or he would leave Obamacare in place and move on to other legislative priorities.

Earlier in the day, Republicans delayed a vote on their bill, initially scheduled for Thursday evening, after Trump and the House Freedom Caucus failed to reach a compromise.

Despite Trump's admonishments, it appears some in the freedom caucus who believe the White House bill leaves too much of Obamacare in place are still planning to vote against the bill. In a Friday morning interview with CNBC, Rep. Mo Brooks, a Republican of Alabama, called it "one of the worst bills" ever, adding "I refuse to surrender."

Treasury yields shot higher after Trump's victory in the Nov. 8 election as investors hoped he would swiftly implement a purportedly pro-business agenda, including corporate tax cuts, deregulation and infrastructure spending.

But health-care reform, which many had believed would pass relatively easily, given that the GOP holds majorities in the House and Senate, is proving more challenging.

"Investors were probably thinking this was going to happen a little quicker," said Charlie Ripley, assistant vice president of capital markets and trading at Allianz Investment Management.

A Census Bureau survey of durable-goods orders showed orders for core goods placed with domestic manufacturers declined in February, dashing investors' hopes for a modest increase. Investors are looking ahead to a report on manufacturing activity from Markit, which is due out at 9:45 a.m. Eastern.

"Soft" data, a category that includes surveys like the durable-goods indicator, have improved markedly since the election, reflecting increased optimism about the pace of economic growth. But, Ripley said, he's hoping to see "hard" data, like reports on manufacturing activity and gross domestic product, will see a commensurate improvement.

"There's definitely a lot of optimism in the market and we'd like to see that soft data and the hard data converge at some point," Ripley said.

(END) Dow Jones Newswires

March 24, 2017 09:37 ET (13:37 GMT)

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