US Manufacturing Grows on Strong Demand

US Manufacturing Grows on Strong Demand

US Manufacturing Grows on Strong Demand


  • The data moved the market due North

Tuesday’s trading session will end early (1:00p EDT), and markets will be closed on Wednesday for the 4th of July Holiday in the US.

A measure of US manufacturing activity surged in June likely as steel and aluminum tariffs caused disruptions to the supply chains, resulting in factories taking longer to deliver goods.

The Institute for Supply Management (ISM) said on Monday its index of national factory activity jumped to a reading of 60.2 last month from 58.7 in May. A reading above 50 in the ISM index indicates an expansion in manufacturing, which accounts for about 12% of the US economy.

“Demand remains robust, but the nation’s employment resources and supply chains continue to struggle,” said the Chairman of the ISM Manufacturing Business Survey Committee.

“Respondents are overwhelmingly concerned about how tariff- related activity is and will continue to affect their business.”

The United States is engaged trade tariff negotiations with its trade partners: China, Canada, Mexico and the EU.

Some analysts fear the tariffs could disrupt supply chains, undercut business investment and potentially wipe out the fiscal stimulus from a $1.5-T tax cut package.

President Donald Trump claims that the United States is being taken advantage of by its trade partners.

The ISM’s supplier deliveries sub-index soared 6.2 points to 68.2 last month. A lengthening in suppliers’ delivery time is normally associated with increased activity, which is a positive contribution to the ISM index.

Economists polled by Reuters had forecast construction spending gaining 0.5% in May. Construction spending accelerated 4.5% on a Y-Y basis.

The Atlanta Federal Reserve is forecasting Q-2 GDP rising at a 3.8% annualized rate. The economy grew at a 2.0% pace in Q-1.

Monday, the major US stock market indexes came in at: DJIA +35.77 at 24307.18, NAS Comp +57.38 at 7567.71, S&P 500 +8.34 at 2726.45

Volume: Trade on the NYSE came in at 756-M/shares exchanged

  • NAS Comp +9.6% YTD
  • Russell 2000 +7.8% YTD
  • S&P 500 +2.0% YTD
  • DJIA -1.7% YTD

HeffX-LTN’s US Major Stock Market Indexes Technical Analysis

Date Symbol Price Technical Analysis Support Resistance
2 July 2018 QQQ 171.1o Neutral (0.22) 170.97 172.93
2 July 2018 DIA 243.07 Neutral (-0.14) 240.09 245.59
2 July 2018 SPY 272.64 Neutral (0.17) 270.60 273.32


Have a terrific 4th of July Freedom Week

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Paul Ebeling

Paul A. Ebeling, polymath, excels in diverse fields of knowledge. Pattern Recognition Analyst in Equities, Commodities and Foreign Exchange and author of “The Red Roadmaster’s Technical Report” on the US Major Market Indices™, a highly regarded, weekly financial market letter, he is also a philosopher, issuing insights on a wide range of subjects to a following of over 250,000 cohorts. An international audience of opinion makers, business leaders, and global organizations recognizes Ebeling as an expert.

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