Ike,..Re: Strong PMI, a weak quaterly GDP number first time in last three years and a very docile deflator-- all adds upt non-inflationary growth and also answers some worries about prospects
of robust corporate profits.
The Chicago PMI is in the heart of the heavy industry part of the US. It not only bodes well for future earnings, it also shows clearly the deflationary impact of basic commodities (prices paid component). But, apart from this excellent news, it will eventually become apparent which companies can manage their growth/earnings. New orders were up strongly and with everybody seemingly looking for a market crash with a following recession, this looks to be a good time to be choosing good companies to invest in.
economeister.com
CHICAGO PURCHASERS: JULY BAROMETER UP SHARPLY, PRICES DROP
Also, the bond market already knew the economy wasn't weak. Without the GM strike and the fall in exports, GDP would have come in at 4.8% or higher. Now does this mean that most of the Asian impact is behind us? I don't know but with companies like CLX, GIC and others reporting much better than expected earnings, and with the media only concentrating on the disappointing earnings, I'd say we're looking at an opportunity.
economeister.com
US 2Q REAL GDP +1.4%, COMPOSITION STRONG DESPITE GM
The only possible concern is wages and benefits; however, if the Commerce Dept. (or whoever calculates productivity) is not measuring productivity correctly, this could be nothing more than a ghost.
Just my 2 cents.
Regards,
Lee |
