7/27/2015
By Dominique Paul, Research Analyst

Markit released preliminary purchasing managers’ index (PMI) readings for China and July on Friday. China saw its PMI decreased to 48.2 in July from a prior reading of 49.4 in June. This raises more fears around China’s economy suffering from contractions in the manufacturing sector. Germany’s PMI fell to a reading of 53.4 from an earlier reading of 53.7. While the index remains above the neutral 50-level (below 50 indicates contractions and above 50 indicates expansion), the report indicates a deceleration in the growth in Germany’s manufacturing sector. Ultimately, the reports led to weakness in the overseas markets.

Markit also released a preliminary PMI report for the United States. For the flash July reading, Markit reported a PMI of 53.8 which is slightly higher than the consensus estimate by one tenth and the June flash reading of 53.4. However, the reading is lower than the July final reading of 54. Similar to Germany, the report indicates that growth is slowing in the US manufacturing industry. Nevertheless, we are seeing modest increases in orders and output, plus export orders rose for the first time since February.

The Census Bureau released a disappointing report on new home sales for the month of June. The seasonally adjusted annual rate (SAAR) for sales of new single-family houses fell by 6.8% month-over-month to 482,000. May figures were revised lower to 517,000 from 546,000. Approximately 45,000 homes were sold in June. Thirty-eight percent of those homes sold between the $200,000-299,999 price range. So far this year, June has the lowest SAAR for new home sales. The month’s lower sales may result in a lower than anticipated gross domestic product (GDP) growth. However, the supply of new homes rose by 3.4% month-over-month to 215,000 which may result in higher sales for the rest of the summer.

Dominique Paul
Wall Street Strategies

Add a Comment!