The major averages fail to hold early gains, on little real news. Entering the final hour with modest losses.
The Institute for Supply Management – New York Purchasing Managers Report or PMI slipped 1.4 points in June to 55, despite a big jump in employment and future conditions. Price data plunged to a 9-month low, falling 17 points to 55.9. This is one of the few series to shrug off trade war fears of late and show a large reversal in price or inflation data.
Factory orders advanced .4% in May, beating expectations for no change, on a big jump in non-durable goods orders. The proxy for business spending non-defense capital goods ex-aircraft increased .3%. As expected trade war and tariffs on metals were cited as negative future trends and may have served to bring demand forward to beat the application of pending tariffs.
Despite considerable trade war rhetoric and a rapidly growing list of tariffs applied by us and our trading partners. The Moody’s Policy Uncertainty index continues its downward trend implying that a trade war is a non-event, at least through the end of June. Tax policy and cuts were cited as the reasons for complacency in the report. It’s worth noting that so far, the assorted trade tariffs have yet to show up in the economic data, but that is about to change.
Reis reports that mall vacancy had its worst period in 9-years during the 2nd quarter after regional mall vacancy rates increased .2% to 8.6%. community or strip malls saw their vacancy rate gain .2% as well to 10.2%. Another chapter in the decimation of American retail compliments of online shopping and a far too high ratio of retail square footage per consumer.
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