U.S. Indices Post New All-Time Highs

The U.S. indices are alive and well during today’s shortened pre-holiday trading session. On the Wall Street open, the DJIA DOW (+58) and S&P 500 SPX (+8) posted new all-time highs. Following a weaker-than-expected group of economic reports, bidders have stepped in and gone long ahead of the early 1:00 PM EST U.S. stock market closure.

U.S. Indices Rally Following Mixed Pre-Market Metrics

Earlier, a few peripheral economic metrics hit the news wires facing the employment and real estate sectors. Here is a quick look at the data:

Event                                                                   Actual      Projected       Previous

MBA Mortgage Applications (June 24)          -0.1%               NA                   1.3%

Challenger Job Cuts (June)                             41.977K            NA                 58.577K

ADP Employment (June)                                    102K             140K                  41K

Continuing Jobless Claims (June 21)             1.686M         1.675M             1.694M

The key figure in this group of numbers is the underperformance of ADP Employment (June). Although the number more than doubled that of May, it missed expectations by 38,000.

All in all, traders aren’t putting much stock in these figures, electing to take on fresh risk in the U.S. indices during today’s shortened Wall Street session.

ISM Non-Manufacturing PMI, Trade Balance Lag Expectations

Following the media buzz surrounding the U.S./China tariff truce crafted at the G-20 Summit last weekend, many eyes were on this morning’s U.S. Trade Balance release for May. The report came in at $-55.5B, below the previous number ($-51.2B) and expectations ($-54.0B).

The lagging trade balance report was complemented by a relatively weak U.S. ISM Non-Manufacturing PMI for June. Figures came in much lighter than expected (55.9), at 55.1. It is being circulated by mainstream media outlets that the employment and new orders sections of the ISM Non-Manufacturing PMI have hit their lowest points since 2017. Either way, the figure hasn’t done much to discourage the U.S. indices. 

If nothing else, the subpar Trade Balance and ISM Non-Manufacturing PMI reports back up the FED’s current dovish stance toward the USD. At this point, it appears that the CME FEDWatch’s 72% chance of a July 31 FOMC ¼ point rate cut is spot on.