Market Update: Wednesday, July 25, 2018

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Daily Insights

  • Market PMI solid, but tariff impacts emerging. Manufacturing data released yesterday showed solid growth, but evidence of tariff impacts has started to emerge. The U.S. purchasing managers’ index (PMI) data released yesterday was 55.5, beating consensus expectations of 55.1. However, average prices charged grew at the fastest pace on record amid increases in input costs, as survey respondents noted higher raw material and fuel costs. Suppliers’ delivery times were also the longest on record amid low inventory and capacity constraints, showing that supply chain constraints are causing significant disruption. While manufacturing growth has been strong this year, the surge in prices and supply chain disruptions could curb further economic activity.

  • Juncker and Trump meeting on trade. President Donald Trump and European Commission President Jean-Claude Juncker are scheduled to discuss trade relations, the latest news in a global trade rift that has roiled international markets and threatened economic growth. Ahead of the meeting, President Trump said that the U.S. and European Union should drop all tariffs, barriers and subsidies. The European Commission has threatened $20 billion in retaliatory tariffs if the U.S. imposes car levies. While we estimate that currently imposed tariffs would cause only a 0.1% to 0.2% drag on U.S. gross domestic product annually, we are closely watching trade discussions and analyzing the impacts of any escalations or future proposals.

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Wednesday

  • New Home Sales (Jun)
  • France: PPI (Jun)
  • Eurozone: M3 Money Supply (Jun)
  • Japan: PPI Svcs YoY(Jun)
  • South Korea: GDP (Q2)

Thursday

Friday

 

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Index data obtained via FactSet

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