A series of headlines coaxed investors to buy today, from generally strong earnings reports to geopolitical headlines such as the election of Boris Johnson as Prime Minister of the United Kingdom (Johnson is expected to complete the long-stalled Brexit, deal or no deal, by the end of the year). Further, U.S. Trade Representative Robert Lighthizer is alleged to be among the officials headed to Beijing on Monday to further trade talks with the Chinese government.
Finally, President Trump announced a 2-year deal has been reached with Congress to extend the debt limit and to increase US discretionary spending in 2020.
U.S. home sales fell based on tight inventory pushing up prices, according to the a report today from the National Association of Realtors. Existing home sales fell 1.7% last month to a seasonally-adjusted annual rate of 5.27 million units. The median existing house price increased 4.3% to reach a record high of $285,700 in June.
Further, the Richmond Federal Reserve Bank manufacturing index, which was expected to rebound, was a huge miss, down 14 points to -12. This particular Fed report tells a different story than the last two regional Fed manufacturing surveys, which were upside surprises. The headline Richmond reading was was the worst since January, 2013. All components were down, but order backlogs was the hardest hit at -26. New orders were down 16 points to -18, shipments slipped into negative territory, down from +5 to -13. Employment and Capex were also weaker.
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