The Philly Fed bounce to 25.7
The Philly Fed bounce to 25.7 from a 19-month low of 19.9 in June and a 1-year high of 34.4 in May was accompanied by an ISM-adjusted Philly Fed rise to 59.7 from 59.4 in June and a 45-year high of 62.5 in May, versus the same 59.7 in April. Monday's Empire State headline slipped to 22.6 in July from an 8-month high of 25.0 in June but a lower 20.1 in May, while the ISM-adjusted measure fell more sharply, to 54.6 from a 12-year high of 57.9 in June and 56.9 in May. For later July surveys, analysts expect a Richmond Fed drop to 17.0 from 20.0, a Dallas Fed drop to 30.0 from 36.5, a Chicago PMI decline to 60.0 from 64.1 in June, an ISM drop to 59.0 from 60.2, and an ISM-NMI drop to 58.0 from 59.1 The mix should allow the ISM-adjusted average of the major surveys to slip back to 58 from the 59 cycle-high set in May and June, versus the same 58 readings in six of eight months through April. Producer sentiment is enjoying a lift from fiscal stimulus, the mining and factory resurgence, and a stronger global economy that has translated to strength in trade in the face of limited capacity constraints and little near-term inflation risk.