Don't mess with Texas

This one comes to us from Steve Feiss, interest rate strategist at Government Perspectives.

"Don't mess with Texas"

On Monday, the latest manufacturing report from the Dallas Fed showed activity in the state falling to a nearly two-year low.

The main focus on Monday's report, however, was commentary from business leaders in the state and how the oil crash has impacted their business across a range of sectors.

But on day two, it's worth asking how this report could impact upcoming manufacturing reports that take readings on a larger swath of the economy.

On Wednesday, we'll get the latest manufacturing PMI report from the Institute for Supply Management, which, according to Feiss, David Rosenberg has said has an 86% correlation with the Dallas Fed.

Expectations are for ISM to come in at 52.5, indicating expansion in the manufacturing sector but at a slower place than in February.

And so while Feiss notes that correlation looks like a bit less now, the question, he writes, is whether ISM catches down or Dallas catches up.