The upcoming July update of the ADP Employment Report is expected to show an increase of 227,000 private nonfarm payrolls in the United States, according to the average forecast from The Capital Spectator, which is based on various econometric estimates. This expected rise is slightly less than the growth seen in June.
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The anticipated risk premium for the Global Market Index (GMI) rose in July to reach a two-month peak. This unmanaged, market-value weighted index of major asset classes is projected to yield an annualized return of 3.7% above the “risk-free” rate over the long term. The latest estimate, informed by data through the end of last month, is a 10 basis points increase from the prior forecast.
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● US personal spending increased by 0.4%, while income rose by 0.2% in June
● US auto sales surged 5.3% in July
● ISM report: US manufacturing growth slightly declined in July
● US construction spending increased sluggishly by 0.1% in June
● Gallup: US consumer spending remained flat in July
In July, a partial market rebound followed two months of widespread losses globally. Notably, there was a significant increase in US real estate investment trusts (REITs) – the first growth after three consecutive monthly declines. Additionally, stock markets in developed nations generally performed better during July. However, some sectors faced challenges, particularly emerging-market stocks and bonds, which experienced notable declines, alongside a substantial drop in commodities.
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● US employment costs decelerated markedly in Q2
● US consumer sentiment fell more than anticipated in July
● Puerto Rico defaulted on bond payments over the weekend
● PMI: Eurozone manufacturing output rose “solidly” in July
● PMI: the decline in manufacturing in China accelerated in July
● The Greek stock market plummeted on Monday after a five-week shutdown
The ISM Manufacturing Index is anticipated to show a slight rise to 54.3 in the forthcoming update for July, according to The Capital Spectator’s average forecast based on various econometric models. This estimate is notably above the neutral benchmark of 50.0, indicating continued moderate growth in this key indicator of US manufacturing activity.
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● Unmade in China: The Hidden Truth about China’s Economic Miracle
By Jeremy R. Haft
Summary via publisher (Polity)
A closer examination of manufacturing practices in China reveals truths that challenge conventional perceptions of the country as an economic powerhouse. Contrary to popular belief, China is not an overwhelming manufacturing giant, but rather, it serves as a significant job creator for the U.S. economy by importing goods in vast quantities, which helps sustain millions of American jobs.
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As July came to a close, the economic momentum in the U.S. showed a modestly positive trend, as reflected in the markets-based estimate of macroeconomic conditions. The Macro-Markets Risk Index (MMRI) recorded a closing figure of +5.9% as of July 30. While this reading is towards the lower end of the past year’s range, MMRI remains above zero, signifying relatively subdued business-cycle risk. A decline below 0% would indicate heightened recession risk, while readings above 0% suggest forthcoming economic expansion. An analysis of market-price data utilizing a probit model also indicates low macroeconomic risk.
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The U.S. economy experienced a rebound in growth during the second quarter, rising by 2.3%. However, the Treasury market remains skeptical about whether this growth will trigger an interest rate hike during the Federal Reserve’s monetary policy meeting in September. The benchmark 10-year Treasury yield dipped to 2.28% on July 30, falling slightly from Wednesday’s close and significantly below the recent peak of 2.50% noted in June.
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● US Q2 GDP increased by 2.3%…
● The Q2 advance keeps a September interest rate hike on the table…
● Some analysts, however, are looking beyond September for the first rate hike…
● Meanwhile, US jobless claims rose from a four-decade low…
● Bloomberg’s Consumer Comfort Index dropped to its lowest point since November…
● Additionally, 1-year inflation in Europe remains mildly positive while the jobless rate is elevated but stable.
