- The Philly Fed said manufacturing continued to expand in June but at a slower pace than in May. Its index of manufacturing activity dropped to 8 from 21.4 the month before. Traders are concerned that the report signals that a recovery is fading in one of the strongest parts of the economy.
- The disappointing manufacturing numbers followed the government's report that the number of people putting in new claims for unemployment benefits rose unexpectedly last week. Initial claims for jobless benefits increased by 12,000 to a seasonally adjusted 472,000.
I don't consider the Philly Fed to be a market mover normally but when you combine these with the monthly labor data a few Friday's ago, and weaker retail sales last Friday the picture gets increasingly cloudy. After all, housing, employment, and retails sales - the 3 dominant parts of an economy that has tried its best to get rid of all manufacturing (the one part of the economy doing very well, thanks to Asians and restocking).
For all that poor news the S&P 500 has only given back 5 points versus Tuesday's close.
We are holding the key 200 day moving average, and just under the 50 day - about a 10 point range here. All eyes, silicon or otherwise, remain on S&P 1108.