The major averages enter the final hour with modest gains on mixed economic data. The 3rd estimate of 2nd Quarter GDP or Gross Domestic Product was unchanged at 4.2%. The details were unremarkable. That said growing warnings related to the impact on corporate profits and trade for the 3rd quarter figures are becoming not only more commonplace, but also dire.
Durable goods orders beat expectations in August on large jumps in defense and transportation orders. The proxy for business spending non-defense capital goods ex-aircraft fell .5%, its worst showing in 5-month’s.
Advance wholesale and retail inventories data shows gains of .8% and .7% respectively in August. A 2nd large monthly advance as companies try to get ahead of the substantial tariff increases in September and mitigate supply chain disruption.
The international trade in goods deficit increased 5.3% in August to 75.8 billion. Exports fell for a 3rd month, imports continue to advance. Will see what effect the tariffs have with September’s data next month, I doubt it will be trivial.
Pending home sales fell for a 4th time in 6-month’s in August, dropping 1.8%. All regions declined led by the west, down a notable 5.9%. On a year ago basis this series is sharply negative, particularly the western region. That said sentiment indexes such as these need to be taken with a grain of salt as consumers frequently say one thing and do another.
The Kansas City Fed manufacturing index slipped a point in September to 13. Far off its recent highs, employment plunged to a barely positive 1, its lowest reading since November of 2016.
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