More signs the economy is building up a head of steam in the second half of the year from two key economic data points Wednesday morning.
The Institute for Supply Management’s ISM report showed a major surge in business activity and new orders along with a pop in employment.
|
ISM Service Economy Report |
Index |
Change |
|
Business Activity |
60.3 |
+8.5% |
|
New Orders |
60.0 |
+8.6% |
|
Employment |
57.2 |
+6.5% |
Factory Orders seemed ho-hum upon release, but a closer look at business investment indicates impressive increases now over the past three months. Non-defense capital goods excluding aircraft increased 0.9% in August after improving 0.8% July and 0.5% June.
Oil has broken above $50/barrel on the 5th straight weekly EIA report of declining inventories. Today's report indicated a decline of 3 million barrels. The $50 level is a key support/resistance level. The energy sector is up 1.67% today.
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The financial sector is also rallying, up 1.5% on the strong data. The Financial Select SPDR (XLF) has made a convincing break above its 50-day moving average at $19.35.
The major indexes are trading at the highs of the day here at midday. Market internals are solid with up volume strong on both the NYSE (76%) and NASDAQ (78%) and 105 new NYSE highs along with 171 new highs on the NASDAQ. Both the Dow and SP500 charts are making consolidation formations that are ripe for a breakout move.
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