Succinct Summation of the Week's Events

Succinct Summation of the Week's Events:

Positives,

1)The US July manufacturing and services composite PMI rose a touch to 55 from 54.8 with services still dominating the business action as this component rose to 56 from 55.3. Understand that this DOES NOT include retail and wholesale trade for some reason. The manufacturing side fell back below 50 at 49.5 from 51.6.

2)Headline and core PCE in June were spot on with expectations with one tenth headline and two tenths core m/o/m gains. The y/o/y change was 2.5% and 2.6% for each respectively vs 2.6% for each in May. 

3)June personal spending rose as expected by .3% m/o/m but May was revised up by 2 tenths so we could get a slight tweak up in the Q2 GDP revision whenever it comes, all else equal.

4)US Q2 GDP growth was 2.8%, above the estimate of 2%. Three tenths of this upside was due to a lower than expected price deflator of 2.3% vs the estimate of 2.6%. Core PCE though of 2.9% was two tenths higher than expected. Personal spending, equipment and IP spend, along with higher inventories and government spending all drove the gain. 

5)Initial jobless claims totaled 235k, remaining elevated relative to recent trends but 3k less than expected and down from 245k last week which included people filling after the July 4^th holiday. Smoothing all this out puts the 4 week average at 236k vs 235k last week, hovering around the highest since last September. Continuing claims slipped by 9k to 1.851mm, but after rising by 13k in the week before.

6)Container shipping prices were mixed w/o/w but didn't rise. The Shanghai to Rotterdam trip was down a slight $7 at $8,260 and as a reminder it started the year at just under $1,700. The route to LA fell $354 w/o/w to $6,934 vs $2,100 at the beginning of the year. 

7)The June US Architecture Billings Index came out and it rose to 46.4 from 42.4 as hopes grow for interest rate cuts. The AIA chief economist said, "Architecture firms continue to face a period of headwinds in the construction sector, driven by elevated interest rates, high construction costs, and generally weak property values. This is the 17th consecutive month of a billings decrease and yet, despite the softness firms remain generally optimistic that conditions will start to improve once interest rates begin to ease."