Morning Report 7/2/12

Vital Statistics:

  Last Change Percent
S&P Futures  1355.4 -1.0 -0.07%
Eurostoxx Index 2280.3 15.5 0.69%
Oil (WTI) 83.5 -1.5 -1.72%
LIBOR 0.461 0.000 0.00%
US Dollar Index (DXY) 81.88 0.253 0.31%
10 Year Govt Bond Yield 1.59% -0.06%  
RPX Composite Real Estate Index 182.8 0.3  

Markets are flattish after Friday’s furious rally and some disappointing economic data. Expect low volume this week as the 4th falls on a Wed. There are no major European events on the calendar this week. Bonds and currencies should close early tomorrow. The 10-year is up about point and a half and MBS are up slightly.

In another bullish sign for the real estate market, we have been seeing someone establishing a long position in the RPX futures market.

Merger Monday is back, as we have $15 billion in new deals this morning. Bristol-Myers is buying Amylin and Linde is buying Lincare. Dell has won the bidding war for Quest Software.

The ISM PMI showed contraction in the manufacturing sector – the first such reading since July of 09 – as new orders collapsed. Economists missed the number big-time, as the index came in at 49.7 vs expectations of 52. The drop in commodities prices dropped the prices paid index to 37 from 47.5.

The Markit PMI shows that manufacturing is not accelerating as the economy expands. The index fell to 52.5 from 54 in May. Remember that 50 is more or less the “zero point” and numbers below indicate a contraction in business conditions. In other words, the latest reading indicates conditions are getting better, but just barely. Weakness in Europe is being offset by stronger domestic demand.

Late Sunday Funny

For some reason this reminds me a little of ATiM.


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