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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Haim R. Branisteanu who wrote (10158)	8/4/2004 11:12:47 AM
From: mishedlo	Read Replies (1) \| Respond to of 116555

U.S. June factory orders stronger than expected - Wednesday, August 4, 2004 2:29:42 PM WASHINGTON (AFX) - Orders for U.S-made factory goods increased 0.7 percent in June, the fourth gain in the past five months, the Commerce Department estimated Wednesday. Much of the increase came from a 79.1 percent rise in orders for defense aircraft. Orders for core capital goods increased 1.1 percent Excluding defense goods, orders rose 0.1 percent in June. Excluding transportation goods, orders rose 0.1 percent. Economists were expecting orders to rise 0.6 percent, according to a survey by CBS MarketWatch. Considering the large upward revision to May's data, orders were much stronger than expected Factory orders increased 0.4 percent in May, in contrast to the 0.3 percent decline originally reported In a separate report, the Institute for Supply Management said its non-manufacturing sentiment index rose to 64.8 percent in July from 59.9 percent in June, despite a decline in the employment index. Factory shipments increased 0.7 percent in June to a record $367.2 billion after rising 0.6 percent in May Inventories increased 0.7 percent in June, matching May's increase. Unfilled orders increased 0.6 percent in June, matching May's increase Wednesday's report updates last week's report on durable goods orders and shipments, while adding detail on nondurable goods Orders for durable goods increased 0.9 percent, revised up from last week's estimate of 0.7 percent. Nondurable goods orders increased 0.5 percent Shipments of durable goods increased 0.8 percent in June, revised up from last week's estimate of 0.7 percent. Shipments of nondurable goods increased 0.5 percent, with paper products showing the largest gain Inventories of durable goods increased 0.9 percent, the largest gain in 4 1/2 years. Inventories of autos increased 5 percent, while inventories of computers climbed 7.1 percent. Inventories of nondurable goods increased 0.4 percent fxstreet.com

To: Haim R. Branisteanu who wrote (10158)	8/4/2004 11:19:59 AM
From: mishedlo	Read Replies (1) \| Respond to of 116555

.S. July nonmanufacturing index expands to 64.8% Wednesday, August 4, 2004 2:21:49 PM WASHINGTON (AFX) -- Activity in the service sectors of the U.S. increased in July, the Institute for Supply Management reported Wednesday. The ISM's nonmanufacturing index rose to 64.8 percent from 59.5 percent in June, indicating a faster pace of expansion. The gain was larger than expected. Economists expected the index to rise to 61.1 percent. Readings over 50 percent in the diffusion index indicate expansion in those sectors. Twelve of 17 industries grew in July. New orders rose to 66.4 percent from 64.2 percent. However, the employment index fell to 50.0 percent from 57.4 percent. The prices paid index fell to 73.1 percent from 76.6 percent Gee we are doing more with fewer people at reduced prices. Employment index about ready to contract. Mish

To: Haim R. Branisteanu who wrote (10158)	8/4/2004 11:27:02 AM
From: mishedlo	Respond to of 116555

FOREX-Yen takes beating as oil surge dims growth outlook Wednesday, August 4, 2004 12:06:09 PM reuters.com By Christina Fincher LONDON, Aug 4 (Reuters) - The yen fell across the board on Wednesday as record high oil prices dimmed Japan's recovery outlook and soured investors' recent enthusiasm for Asian stock markets. The euro, meanwhile, teetered above recent six-week lows against the dollar as news of a rise in German unemployment reinforced concerns over the sustainability of the region's export-led recovery. The yen suffered the same fortunes as Tokyo's benchmark stock index, which tumbled to its lowest in over two months as U.S. light crude touched $44.28 a barrel -- the highest price since oil futures were launched on the New York Mercantile Exchange in 1983. "High oil prices squeeze the yen from both sides," said Trevor Dinmore, foreign exchange strategist at Deutsche Bank. "Not only does Japan get a cost shock, because it imports all its oil, but the yen is a very equity flow-dependent currency." Surging oil prices and the prospect of higher interest rates have made investors nervous about the sustainability of the global economic upturn, encouraging a flight out of equities and into safe-haven bonds. The dollar was up three-quarters of a percent at 111.50 yen <JPY=> at 1145 GMT, slightly outperforming the euro which was up half a percent at 133.96 yen <EURJPY=>. The euro stood at $1.2012 <EUR=>, bobbing just above six-week lows below $1.1990 hit last week. EQUITY LINK Tokyo's Nikkei share average <.N225> closed 1.17 percent down on the day after plunging 2 percent at one point in the session to its lowest reading since late May. European shares also struggled but analysts noted that most investors moving out of euro zone equities simply switched into euro zone government bonds, meaning the currency impact was limited. Japan's zero interest rate policy, however, means the yields on Japanese government bonds (JGBs) are unpalatable to most overseas fund managers. "Investors in euroland and the United States simply substitute stocks for bonds," said Kamal Sharma, currency strategist at Dresdner Kleinwort Wasserstein. "But returns on JGBs are so low, when foreign investors pull out of Japanese shares they tend to pull out of Japan altogether." Futures markets were pointing to a second day of declines on Wall Street, with investors awaiting data on factory orders and the dominant services sector later. PAYROLLS WAIT The dollar remained firm against most European currencies, buoyed by expectations of an upbeat U.S. July jobs report on Friday. The closely-watched U.S. labour market report is expected to give new clues on the strength of the U.S. economy and could influence the market's expectations for future rate hikes. For now, the Federal Reserve is expected to raise its target federal funds rate to 1.50 percent from 1.25 percent at its next policy-setting meeting on August 10. "The market is transfixed by the payrolls data," said one analyst. "So the chances of any big moves before then are pretty slim." Economists expect an increase of around 228,000 new jobs in July, accelerating from a gain of 112,000 in June. However, estimates range up to around 300,000. [If this market is expecting 228,000 I think it will be disappointed - mish] Jobs news from Germany, the euro zone's biggest economy, was less encouraging, with unemployment rising by 11,000 in July, twice the rise economists had forecast. The German Labour Office said the figures showed that economic recovery had yet to have an effect on the labour market. [Economic recovery - what economic recovery? - mish] Separate data showed the euro zone's services sector expanded at a steady pace in July, but high oil prices continued to squeeze firms' profits margins. The Reuters Eurozone Business Activity Index held steady at 55.3 in July, the same level as in June and below the consensus forecast of 55.5.