Dow climbed 155, advancers over decliners almost 4-1 & NAZ added 46. The MLP index soared 5 to 462 & the REIT index was flat at 278. Junk bond funds were higher while Treasuries saw some selling. Oil joined in the rally & gold edged higher after clocking its biggest quarterly fall ever.
AMJ (Alerian MLP Index tracking fund)
Photo: Bloomberg
Manufacturing rebounded in Jun, showing gains in the US housing market & stronger auto sales are helping stabilize the industry. The Institute for Supply Management manufacturing index climbed to a 3-month high of 50.9 from 49 in May, beating the forecast of 50.5. A reading of 50 is the dividing line between expansion & contraction. Sustained demand for automobiles & housing materials, combined with lean inventories, are underpinning orders & production at the nation’s factories. Fading effects of federal budget cuts along with growth in exports as Europe emerges from recession stand to further benefit manufacturers in the US .
Photo: Yahoo
But manufacturing activity grew in Jun at its slowest pace in 8 months as overseas demand dried up & firms took on the fewest new workers in more than 3 years. Financial data firm Markit said its final Manufacturing Purchasing Managers Index stood at 51.9 in Jun, below 52.3 in May & a preliminary Jun estimate of 52.2. A reading above 50 indicates expansion. The output index rose to 53.5 from 52.7 but domestic orders were little changed & orders from abroad fell at their fastest rate since the height of the financial crisis in mid-2009. The employment sub-index fell to 49.9, the lowest in 3½ years & "consistent with roughly 30,000 jobs being lost per month in the manufacturing sector," according to Markit chief economist Chris Williamson. It stood at 52.6 in May. "Firms are responding to the increasingly worrying order book trend by pulling back on recruitment," Williamson said. That could complicate things for the Federal Reserve, which said it could begin scaling back its massive stimulus program later this year provided the economy does not lose momentum. Economists expect growth in the broader economy to have slowed to 1.7% in Q2 from 1.8% in Q1, though most say it should pick up steam in H2.
Photo: Bloomberg
2 gauges of manufacturing in China fell in Jun, underscoring a sustained slowdown as policy makers seek to rein in financial speculation & real-estate prices. An official Purchasing Managers’ Index dropped to 50.1, the lowest level in 4 months, from 50.8, according to the National Bureau of Statistics, & China Federation of Logistics & Purchasing said. A private PMI from HSBC Holdings Plc & Markit Economics was 48.2, the weakest since Sep. Readings above 50 signal expansion. Weaker gains in manufacturing & a cash squeeze in the banking system add to odds that Li Keqiang will become the first premier to miss an annual growth target since the Asian financial crisis in 1998. In the latest signal that policy makers will tolerate slower expansion, President Xi Jinping said local officials shouldn’t be judged solely on their record in boosting gross domestic product. Expansion is estimated to slowed for a 2nd straight qtr after export growth collapsed & Li reined in record credit expansion to contain shadow-banking risks.
Chinese Manufacturing Gauges Fall as Slowdown Persists
Stocks started H2 off strongly. Manufacturing data was mixed but the bulls are back bidding up stocks. Today will probably remain strong as auto companies report sales figures for Jun. Then comes the big jobs report on Fri. It is expected to show enough strength to be good, but not good enough to cause the Federal Reserve to slow its bond buying program. Alcoa (AA), a Dow stock, will kick off earnings season next Mon.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
Treasury yields:
U.S. 3-month |
0.04% | |
U.S. 2-year |
0.35% | |
U.S. 10-year |
2.50% |
| CLX13.NYM | ...Crude Oil Nov 13 | ...96.12 |  ....1.02 | (1.1%) |
| GCN13.CMX | ...Gold Jul 13 | .......1,240.60 | ...16.80 | (1.4%) |
Photo: Bloomberg
Manufacturing rebounded in Jun, showing gains in the US housing market & stronger auto sales are helping stabilize the industry. The Institute for Supply Management manufacturing index climbed to a 3-month high of 50.9 from 49 in May, beating the forecast of 50.5. A reading of 50 is the dividing line between expansion & contraction. Sustained demand for automobiles & housing materials, combined with lean inventories, are underpinning orders & production at the nation’s factories. Fading effects of federal budget cuts along with growth in exports as Europe emerges from recession stand to further benefit manufacturers in the US .
Photo: Yahoo
But manufacturing activity grew in Jun at its slowest pace in 8 months as overseas demand dried up & firms took on the fewest new workers in more than 3 years. Financial data firm Markit said its final Manufacturing Purchasing Managers Index stood at 51.9 in Jun, below 52.3 in May & a preliminary Jun estimate of 52.2. A reading above 50 indicates expansion. The output index rose to 53.5 from 52.7 but domestic orders were little changed & orders from abroad fell at their fastest rate since the height of the financial crisis in mid-2009. The employment sub-index fell to 49.9, the lowest in 3½ years & "consistent with roughly 30,000 jobs being lost per month in the manufacturing sector," according to Markit chief economist Chris Williamson. It stood at 52.6 in May. "Firms are responding to the increasingly worrying order book trend by pulling back on recruitment," Williamson said. That could complicate things for the Federal Reserve, which said it could begin scaling back its massive stimulus program later this year provided the economy does not lose momentum. Economists expect growth in the broader economy to have slowed to 1.7% in Q2 from 1.8% in Q1, though most say it should pick up steam in H2.
Photo: Bloomberg
2 gauges of manufacturing in China fell in Jun, underscoring a sustained slowdown as policy makers seek to rein in financial speculation & real-estate prices. An official Purchasing Managers’ Index dropped to 50.1, the lowest level in 4 months, from 50.8, according to the National Bureau of Statistics, & China Federation of Logistics & Purchasing said. A private PMI from HSBC Holdings Plc & Markit Economics was 48.2, the weakest since Sep. Readings above 50 signal expansion. Weaker gains in manufacturing & a cash squeeze in the banking system add to odds that Li Keqiang will become the first premier to miss an annual growth target since the Asian financial crisis in 1998. In the latest signal that policy makers will tolerate slower expansion, President Xi Jinping said local officials shouldn’t be judged solely on their record in boosting gross domestic product. Expansion is estimated to slowed for a 2nd straight qtr after export growth collapsed & Li reined in record credit expansion to contain shadow-banking risks.
Chinese Manufacturing Gauges Fall as Slowdown Persists
Stocks started H2 off strongly. Manufacturing data was mixed but the bulls are back bidding up stocks. Today will probably remain strong as auto companies report sales figures for Jun. Then comes the big jobs report on Fri. It is expected to show enough strength to be good, but not good enough to cause the Federal Reserve to slow its bond buying program. Alcoa (AA), a Dow stock, will kick off earnings season next Mon.
Dow Jones Industrials
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