We got a massive wave of July economic data today, and overall it was good.
First, the scoreboard:
- Dow: 15,628.0, +128.4, +0.8%
- S&P 500: 1,706.8, +21.1, +1.2%
- NASDAQ: 3,675.7, +49.3, +1.3%
And now, the top stories:
- The Dow Jones Industrial Average and the S&P 500 closed at all-time highs today.
- "[The] moment of truth for the economy will arrive in the second half of this year," said Bank Of America Merrill Lynch's Michael Hartnett. "If ever the US were finally to achieve “escape velocity” it must be now. Significant monetary stimulus, the end of fiscal austerity, a booming housing market, a cheap dollar, and record corporate cash balances mean the US economy should meaningfully accelerate in coming quarters."
- It's the first of the month, which means we got the manufacturing purchasing managers index (PMI) reports from every major economy in the world. And the big picture is becoming clear: the emerging Asian economies are slowing while the struggling European economies are coming back.
- Manufacturing reports from China, South Korea, Taiwan, and Australia all reflected decelerating growth or out right contraction. China's official NBS PMI actually climbed to 50.3 in July from 50.1 a month ago. But the unofficial HSBC PMI, which is more exposed to small and export-driven companies, fell to 47.7. Any reading below 50 signals contraction.
- Manufacturing reports from Italy, France, Germany, and Greece all improved. The Eurozone composite index climbed to 50.3 in July from 48.8 a month ago. This was the first time this index was above 50 in two years.
- The U.S. continues to be in good shape. The ISM's manufacturing index surged to 55.4 in July from 50.9. Economists were looking for a reading of 52.0. Of note, the employment sub-index jumped to 54.4 from 48.7 a month ago.
- Construction spending unexpectedly fell 0.6% in June. Economists were looking for a 0.4% gain. Among other things, spending on religious constructions plunged 6.8%.
- Initial weekly jobless claims fell to 326,000, the lowest level since January 2008. Economists were looking for a print of 345,000. "We suggest taking the latest reading with a grain of salt as the Labor Department may be having some trouble seasonally adjusting the data," warned TD Securities' Gennadiy Goldberg. "While the Labor Department noted no special factors influencing the claims data, they did cite ‘typical July volatility’ as the basis for the stronger claims reading. Unadjusted claims tend to perform quite positively during this time of the year, leading to less supportive seasonal adjustment factors."
- The Bureau of Labor Statistics will publish the July jobs report tomorrow. Economists estimate that U.S. companies added 185,000 nonfarm payrolls during the month as the unemployment rate edged down to 7.5%.
- Don't Miss: 10 Mind-Boggling Facts About China's Massive Manufacturing Sector »
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