The report on the Chicago Purchasing Managers Index is showing more and more weakness, but perhaps not as much as expected.  The change in the University of Michigan sentiment barometer is weak as well.

The adjusted Chicago reading for June was 52.9 from 52.7 in May, but Bloomberg had a consensus estimate of 53.1 for the month of June. Inflation hawks can go on vacation as the report showed that the prices paid component fell to 54.0 in June from 60.4 in May.  The supplier deliveries also fell to 54.2 from 56.2.  Even the new orders index fell to 51.9 in June from 52.9 in May. One bright spot is rather surprising from the employment side of the index.  The June Employment Index component rose to 60.4 from 57.0 and that goes against the trends we have been seeing of late.  This is just one region rather than the larger ISM report we will look for next week.

Reuters/University of Michigan sentiment is of course a refreshing of the preliminary number but it is weak as well.  The month-end sentiment hit 73.2 versus a Bloomberg consensus of 74.1.  The prior reading was 74.1 and that was the lowest reading of the year.  It is worth noting that the lowest economist projection under the Bloomberg survey was 73.5, so this tanked on all fronts.  The current portion of the index was 81.5 and the expectations was a dismal 67.8, which signals that things are expected to weaken further.

More good news at hand, at least if you are looking upside down at those charts.

JON C. OGG

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