Stock Market Update

[BRIEFING.COM] The major indices moved lower in recent action. 

The June ISM Manufacturing Index checked in at 48.5% (Briefing.com consensus 49.1%) versus 48.7% in May. The dividing line between expansion and contraction is 50.0%, so the June reading suggests there was a faster pace of contraction in the manufacturing sector last month. This was the third straight month (and 19th out of 20) that economic activity in the manufacturing sector contracted.

The key takeaway from the report is that each component remained in a state of contraction -- except prices, which slowed from the prior month -- signaling a state of subdued activity for the manufacturing sector that fits with a slowing economy.

Total construction spending decreased 0.1% month-over-month in May (Briefing.com consensus 0.1%) following an upwardly revised 0.3% increase (from -0.1%) in April. Total private construction was down 0.3% month-over-month while total public construction was up 0.5% month-over-month. On a year-over-year basis, total construction spending was up 6.4%.

The key takeaway from the report was the drag in private residential spending that was driven by a decline in new single-family construction at a time when overall housing inventory has been constrained due to a lack of inventory for existing homes.