Economy
Business Inventories and Sales Confirming Weak Q2 GDP Expectations
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Business inventories for the month of May were up 0.3%, while inventory sales were 0.1% lower in May. The report from the Commerce Department does have a rather large lag — this is a May report — but it should reinforce and confirm the slowing data that we saw in late-May and into June. It also shows yet one more reason why a “Sell in May and go away!” thesis rules for so many investors as there is just so much history pointing to a summer slowdown.
Dow Jones had a consensus inventories target of +0.2% for May, and Bloomberg was calling for a reading of +0.3%.
The seasonally adjusted figure came to $1.578 trillion in inventories. The seasonally adjusted sales figures were $1.245 trillion. This report should act to mute any high hopes that the second quarter’s GDP report will show much upside.
The markets continue to linger on Monday after weakness in Europe again, with the DJIA down about 80 points and with the S&P 500 Index down about 7 points.
JON C. OGG
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