Succinct Summation of the Week's Events

Succinct Summation of the Week's Events:

Positives,

1)The US June manufacturing and services PMI rose a hair m/o/m to 54.6 from 54.5 with both components up a touch from May. That though is better than the estimate of 53.5. The services component continued to lead the way at 55.1 "buoyed by rising demand. Inflows of new work into the service sector rose at the sharpest rate for a year in June, driven mainly by rising domestic demand. Export orders for services, which includes spending by non-residents in the US, meanwhile fell at the slowest rate seen over the past five months." The unemployment component too finally lifted. Manufacturing rose to 51.7 but S&P Global said "albeit with the latter's recent revival losing some momentum." They said that because "prospects were seen to have darkened in manufacturing, with optimism sliding to its lowest for just over 1 1/2 years and running well below the long run average." Optimism on services though rose to a 3 month high. "Service providers often reported improved sentiment on the back of cooling cost of living pressures and the anticipation of lower interest rates."

2)The June NY manufacturing index rose to -6.0 from -15.6 and 4 pts better than expected, though of course still reflecting contracting activity. The real bright spot was the 6 month activity outlook which jumped to 30.1 from 14.5 and that’s the highest since March 2022. Expectations for new orders seemed to help lift overall confidence as inventory expectations remained low and just maybe the hoped for inventory restock is upon us. Expectations for employment rose too but held steady at low levels for capital spending. The inflation outlook for prices paid and those received fell a touch.

3)From Accenture: On AI, "We also have leaned into the new area of growth, Gen AI, which is comprised of smaller projects as our clients primarily are in experimentation mode."

4)From Lennar: "The demand for housing remains strong, limited by affordability, interest rates and sometimes wavering consumer confidence. Additionally, the chronic housing shortage driven by over a decade of underproduction of housing stock is additionally problematic for families seeking affordable, or attainable supply. Demand remains robust if it can be supplied at an attainable price point with interest rate support that enables the consumer to transact."

5)India's manufacturing and services June composite PMI rose to 60.9 from 60.5 with both manufacturing and services confidence increasing a touch m/o/m. 

6)Japan said its May CPI headline rate rose to 2.8% from 2.5% but the core/core rate dipped to 2.1% from 2.4%, each one tenth below expectations.