Dow shot up 120, advancers over decliners 5-2 & NAZ gained 37. The MLP index was up 1 to the 252s & the REIT index rose 1+ to the 282s. Junk bond funds were weak & Treasuries sold off as the stock markets rallied. Oil advanced to a 1-week high after Chinese manufacturing grew,
claims for US jobless benefits fell & the Federal Reserve maintained its bond-buying program. Gold was flattish.
AMJ (Alerian MLP Indes tracking fund)
Photo: Bloomberg
US. factory activity expanded in Jul at the fastest pace in 2 years, fueled by surges in new orders, production & hiring, showing manufacturing is rebounding & can provide a spark to growth. The Institute for Supply Management index of factory activity jumped to 55.4 in Jul, up from 50.9 in Jun. A reading above 50 indicates growth. Stronger growth at US factories could aid a sluggish economy that has registered tepid growth over the past 3 qtrs. And it could provide crucial support to a job market that has begun to accelerate but has added mostly lower-paying service jobs. Manufacturing had struggled in first few months of the year, held back by weaker global growth & gov spending cuts. And slower production led factories to slash jobs from Mar-Jun. But those trends have started to reverse. Europe's economies have shown signs of life in recent months. That likely contributed to a gain in US exports in Q2. Businesses also spent more on equipment in Q2 & have boosted orders for 4 straight months. As those orders are filled, factory output should increase.
Manufacturing in U.S. Accelerates More Than Forecast
Photo: Yahoo
Spending on US construction projects fell in Jun by the largest amount in 5 months as gov building activity declined to the lowest level since 2006. Even housing activity slowed but that setback was likely to be temporary. Construction spending dropped 0.6 % in Jun compared with May when spending had surged 1.3%, according to the Commerce Dept. It was the biggest decline since a 2.3% drop in Jan. Housing construction was flat during the month with a gain in remodeling offsetting declines of 0.8% in single-family construction & a fall of 3.3% in multi-family projects. Residential construction has been a bright spot in a sluggish economy this year & that strength was expected to continue even though mortgage rates have risen from their lows. Total construction stood at an annual rate of $884B in Jun, 3.3% above the level of a year ago. Even with the Jun slowdown in residential construction, activity in this area is 18.1% above the level of a year ago. Nonresidential construction dropped 0.9%, reflecting weakness in the construction of offices, hotels & shopping centers, marking the first decline after 4 months of gains. Gov spending declined 1.5% to an annual rate of $261B, the lowest level since Nov 2006. State & local building was down 1.1% & federal construction projects fell 1.5%.
Construction Spending in U.S. Unexpectedly Declined in June
Photo: Bloomberg
Claims for jobless benefits unexpectedly dropped to the lowest level in more than 5 years, extending swings typical for the month of Jul. Applications for unemployment insurance payments declined 19,000 to 326K, the fewest since Jan 2008, from a revised 345K in the prior week, according to the Labor Dept (matching the forecast). However the data were still being influenced by the auto plant shutdowns that play havoc with the figures at this time of year. The less-volatile 4-week moving average declined to 341K, a 2-month low, from 345K. The number continuing to collect jobless benefits dropped 52K to 2.95M. The number of job seekers who’ve exhausted traditional state benefits & are collecting emergency & extended payments decreased by 52K to 1.57M.
Jobless Claims in U.S. Fall to Lowest Level in Five Years
The bulls are back in charge taking the Dow & S&P 500 to new record highs. Dow is up a whopping 2½K YTD, an impressive rise by any standard. It's more amazing when it has not been backed by strong economic data. Even at these records levels, all is not well in the markets. Junk bond funds (stocks with high yields) are a good 10% of their highs from earleir this year. The REIT index is 33 below its peak & the MLP index has been trading sideways for months, near its record highs. As long as the Federal Reserve keeps buying bonds, the bulls are happy.
Dow Jones Industrials
AMJ (Alerian MLP Indes tracking fund)
Treasury yields:
U.S. 3-month |
0.03% | |
U.S. 2-year |
0.32% | |
U.S. 10-year |
2.67% |
| CLU13.NYM | ...Crude Oil Sep 13 | ...107.30 |  ...2.27 | (2.2%) |
| GCQ13.CMX | ...Gold Aug 13 | .......1,311.30 | ....1.10 | (0.1%) |
Photo: Bloomberg
US. factory activity expanded in Jul at the fastest pace in 2 years, fueled by surges in new orders, production & hiring, showing manufacturing is rebounding & can provide a spark to growth. The Institute for Supply Management index of factory activity jumped to 55.4 in Jul, up from 50.9 in Jun. A reading above 50 indicates growth. Stronger growth at US factories could aid a sluggish economy that has registered tepid growth over the past 3 qtrs. And it could provide crucial support to a job market that has begun to accelerate but has added mostly lower-paying service jobs. Manufacturing had struggled in first few months of the year, held back by weaker global growth & gov spending cuts. And slower production led factories to slash jobs from Mar-Jun. But those trends have started to reverse. Europe's economies have shown signs of life in recent months. That likely contributed to a gain in US exports in Q2. Businesses also spent more on equipment in Q2 & have boosted orders for 4 straight months. As those orders are filled, factory output should increase.
Manufacturing in U.S. Accelerates More Than Forecast
Photo: Yahoo
Spending on US construction projects fell in Jun by the largest amount in 5 months as gov building activity declined to the lowest level since 2006. Even housing activity slowed but that setback was likely to be temporary. Construction spending dropped 0.6 % in Jun compared with May when spending had surged 1.3%, according to the Commerce Dept. It was the biggest decline since a 2.3% drop in Jan. Housing construction was flat during the month with a gain in remodeling offsetting declines of 0.8% in single-family construction & a fall of 3.3% in multi-family projects. Residential construction has been a bright spot in a sluggish economy this year & that strength was expected to continue even though mortgage rates have risen from their lows. Total construction stood at an annual rate of $884B in Jun, 3.3% above the level of a year ago. Even with the Jun slowdown in residential construction, activity in this area is 18.1% above the level of a year ago. Nonresidential construction dropped 0.9%, reflecting weakness in the construction of offices, hotels & shopping centers, marking the first decline after 4 months of gains. Gov spending declined 1.5% to an annual rate of $261B, the lowest level since Nov 2006. State & local building was down 1.1% & federal construction projects fell 1.5%.
Construction Spending in U.S. Unexpectedly Declined in June
Photo: Bloomberg
Claims for jobless benefits unexpectedly dropped to the lowest level in more than 5 years, extending swings typical for the month of Jul. Applications for unemployment insurance payments declined 19,000 to 326K, the fewest since Jan 2008, from a revised 345K in the prior week, according to the Labor Dept (matching the forecast). However the data were still being influenced by the auto plant shutdowns that play havoc with the figures at this time of year. The less-volatile 4-week moving average declined to 341K, a 2-month low, from 345K. The number continuing to collect jobless benefits dropped 52K to 2.95M. The number of job seekers who’ve exhausted traditional state benefits & are collecting emergency & extended payments decreased by 52K to 1.57M.
Jobless Claims in U.S. Fall to Lowest Level in Five Years
The bulls are back in charge taking the Dow & S&P 500 to new record highs. Dow is up a whopping 2½K YTD, an impressive rise by any standard. It's more amazing when it has not been backed by strong economic data. Even at these records levels, all is not well in the markets. Junk bond funds (stocks with high yields) are a good 10% of their highs from earleir this year. The REIT index is 33 below its peak & the MLP index has been trading sideways for months, near its record highs. As long as the Federal Reserve keeps buying bonds, the bulls are happy.
Dow Jones Industrials
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