The major equity indices continued to demonstrate weakness ahead of the market open this morning. The Dow Jones Industrial average registered down 165 points, while the NASDAQ was as down over 36 points and the SP 500, down 19 points. However, the major indices have spent most of the session making a slow crawl to the upside. The Dow Jones is less than 60 points away from breaking even and the S&P 500 and NASDAQ are even closer. Nevertheless, for the month of august, the major indices will have each declined close to 6%. Observers are concerned about how the Fed is strongly considering hiking interested rates in September. There were a couple domestic manufacturing reports released this morning. The first from the Chicago Fed District and the second from the Dallas Fed District. Both reports left more to be desired.

Manufacturing slowed in Chicago during the month of August. The district’s purchasing mangers’ index (PMI) was reduced by 30 basis points to 54.4 from 54.7 in the prior month. Weakness was driven by a slowdown in the amount of monthly new orders and production. Also, backlogs contracted for the seventh month in a row. One positive from the report centered on employment. During the month, the employment index rose to its second highest level since April 2015, although it remains near 5½-year lows.

In Dallas, things were even less positive during August. Dallas’ manufacturing general activity index declined to a reading of -15.8 from a reading of -4.6 in July. The street had called for a reading of -2.5. August represented the fourth month in a row in which the employment index fell. 15% of the companies surveyed reported net hiring while 16% reported net layoffs. Nevertheless, the hours worked index rose significantly to 0.6 from -6.3 in July. The production index also improved, rising to -0.8 from -1.9. However, the new orders index decreased to -12.5 from 0.7 which may result in September production being reduced.