The Divergent US data: Consumer confidence, Const. Spending Falls & ISM Manufacturing Index rises.

 

1 )  Intraday Economic News: Consumer Sentiment Falls To 71.5 In June :

The Reuters/University of Michigan Consumer Sentiment Index edged down to 71.5 in June from its preliminary 71.8 reading and the 74.3 print seen in May. This was slightly weaker than the consensus expectation of 72. The expectations component explained all of the weakness; it dropped by almost four points, to 64.8, in June from its May reading of 81.9 and the preliminary 79.6 figure. The reading was not too far from expectations, and will likely get sidelined by news from the manufacturing and construction sectors.

2)   Intraday Economic News: U.S. Construction Spending Falls 0.6% In May

U.S. construction spending fell 0.6% in May versus April. This was much weaker than the 0.3% drop we had expected (the consensus expectation was for a flat reading). Moreover, the month before was downwardly revised to a 0.6% drop (previously up 0.4%), as was the March figure (downwardly revised to a 0.2% drop from a 0.1% gain previously reported). On a year-over-year basis, total construction was down 7.1% in May.
Residential construction fell 2.1% month over month in May, after a 2.8% gain in April, and remains down 6.9% from last May. Total nonresidential construction spending edged up 0.1% month over month in May, as a 1.2% gain in private nonresidential construction spending offset the 0.8% decline in public nonresidential spending. Total nonresidential spending is still down 7.2% from last year. Public construction spending fell 0.8% month over month in May and is down 9.3% from the level of last year. Although this disappointing data isn't too shocking, it may take some of the steam out of today's market rally, given the still-dragging housing sector and the bad weather conditions earlier this year.

 

3 )  Intraday Economic News: ISM Manufacturing Index Climbs Almost Two Points, To 55.3, In June.

The Institute for Supply Management (ISM) reading climbed to 55.3 in June, after falling almost seven points, to 53.5, in May. The reading was stronger than the consensus expectation of 52.2 but wasn't too much of a surprise after the Chicago Purchasing Managers' Index/ISM report surprised on the upside yesterday. The employment subcomponent edged up to 59.9 from 58.2, and new orders edged up 0.6 points, to 51.6, after plunging almost 11 points, to 51, in May. The better-than-expected report adds credence to the notion that the supply constraints from Japan's earthquake and tsunami are starting to ease, which will likely add support to the rally today.

The markets are sideways waiting for Quarterly Results, On the backdrop of US Debt ceiling debate. The warnings about US debts have been shrugged off and not reflect in or priced in.