The increase in the June ISM non-manufacturing Index was the largest single-month gain in the index’s 23-year history. Of course, the decrease in April was the largest-ever decrease. Nonetheless, the June new orders component was notably strong, coming in at 61.6 vs 41.9 in May,
June payroll adds of +4.8MM far exceeds consensus for a second consecutive month and clearly a positive development. However, the BLS statement pointed out the largest gains came in leisure and hospitality businesses with employment in food services and drinking establishments increasing by ~1.5 million.
Thursday’s release of weekly jobless claims and June payroll data (day early because markets are closed Friday) has the potential to shift the narrative. Treasury yields are particularly sensitive to payroll surprises and with increased forecast uncertainty (unusual high dispersion among economists), seasonally light liquidity
China June PMIs are expected to stay slightly decelerate but stay in expansion territory with consensus looking for manufacturing at 50.4, down from 50.6 in May and non-manufacturing at 53.4, down from 53.6. Tomorrow’s Powell/Mnuchin testimony before the House will likely include questions on low
The significance of rising case counts in TX, FL and CA are now being watched for signs of a coincident loss of momentum in the high frequency economic indicators. At the moment, all large companies are proceeding with their reopening plans with the notable exceptions
Weekly claims came in at 1.48M down from 1.54M and 1.56M in the prior two weeks but higher than consensus estimates for 1.325M. While it’s good to see fewer claims each week, the descent trajectory and continuing claims number (19.5M this week vs. 20.3M, 20.6M,
Troubling coronavirus headlines are the main driver on rising US case counts (still South and West) and the reimposition of lockdown orders for a German state due to a localized outbreak. US-EU trade also in focus after an EC official said the EU will continue
The US and global economy are recovering from the quickest and deepest recession ever. During a recovery, there’s a strong tendency for markets to grind higher as macro data moves higher. Today’s June flash PMIs from the UK, Eurozone and US came in better than
June Fed surveys (Empire manufacturing and Philadelphia Fed) that were released last week came in well-ahead of consensus. Economic data from developed markets along with high frequency indicators have continued to show signs of very strong bounce in activity, but the two Fed surveys caught
Light equity positioning and elevated bearish sentiment are keeping the pain trade aimed higher. Yesterday’s release of weekly AAII sentiment (individual investors) resulted in 47.78 as bearish and only 24.37 as bullish. The all-time record high in bearish sentiment was 52.66, reached on May 7
