The market is getting to digest some additional manufacturing data this morning, with the latest installment of economic weakness coming out of the Richmond Federal Reserve. The manufacturing index fell to -17 in July, versus only -1 in June. The services revenue also was down sharply at -11 for July, versus a positive 11 reading from June. Bad news continues on the retail front as the July data came down to -18, versus a positive reading of 3 in June. The shipments component was the worst component here at -23 in July, versus a flat reading of zero in June.
As far as how this overall -17 reading in July compared to estimates, Bloomberg was calling for a reading of 0.0. Again, how can the economists be expecting improvements at this point?
Today’s data is just one more weak regional report that supports weaker data on the broader economy. We will be paying close attention to broader PMI, confidence, and other reports in the coming days and weeks. Based on the news that has been coming out of economic reports and from corporate guidance, we cannot help but question when economists are looking for stability or even improvement at this point.
JON C. OGG