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Among a deluge of economic data, we saw two strong regional Fed surveys out of the New York and Philadelphia regions.  First, in the New York region, the General Business Conditions of the Empire Manufacturing report came in at a level of 9.0 versus expectations for a level of 4.0.  This month’s reading was the highest level since April (9.6) and the second highest reading since January 2015.  Even more impressive than the current conditions index was expectations for six months from now.  That index rose from 29.9 up to 50.2, which is the highest reading since January 2012 and the largest one-month increase since November 2011.

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In the Philadelphia region, we saw similar strength as the headline index for business conditions exceeded consensus expectations of 9.1, rising from 7.6 up to 21.5.  That’s both the highest monthly reading and the largest one-month increase since November 2014.  Skeptics may argue that all of the recent improvement in data is based on surveys and expectations rather than hard data, but clearly, sentiment about the future has changed, and if this sentiment doesn’t materialize it would go down as one of the biggest fake-outs ever seen.

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