Stocks Keep Positive Start to August Alive…..

Upbeat global manufacturing reports were followed by today’s stronger-than-expected June U.S. factory orders data. However, some weakness in tech shares and the stalemate on Capitol Hill regarding the size and scope of an expected new fiscal relief package appeared keep the gains in check. Take-Two Interactive Software posted positive Q1 earnings results and raised its guidance, KLA Corporation was down despite topping forecasts and boosting its dividend, and Ford announced a new CEO. Treasury yields gave back yesterday’s modest bounce as bond prices rose, the U.S. dollar ticked lower, while crude oil prices were higher and gold rallied. Europe finished mixed, while markets in Asia were higher.

The Dow Jones Industrial Average rose 164 points (0.6%) to 26,828, the S&P 500 Index increased 12 points (0.4%) to 3,307, and the Nasdaq Composite gained 38 points (0.4%) to 10,941. In moderate volume, 863 million shares were traded on the NYSE and 3.9 billion shares changed hands on the NASDAQ. WTI crude advanced $0.69 to $41.70 per barrel and wholesale gasoline was unchanged at $1.21 per gallon. Elsewhere, the Bloomberg gold spot price jumped $36.49 to $2,013.47 per ounce, and the Dollar Index—a comparison of the U.S. dollar to six major world currencies—moved 0.1% lower to 93.26.

Factory orders rebound more than expected, bond yields are dipping…..

Factory orders rose 6.2% month-over-month (m/m) in June, versus the Bloomberg estimate of a 5.0% gain, and compared to May’s downwardly-revised 7.7% gain. This was the second-straight monthly rebound from the historic 13.5% tumble in April which followed the 11.0% fall in March. Stripping out the volatile transportation component, orders grew 4.4%, compared to May’s unadjusted 2.6% rise. Final durable goods orders, preliminarily reported last week, were revised higher to a 7.6% m/m gain for June, and orders for non-defense capital goods excluding aircraft, considered a proxy for business spending, were adjusted upward to a 3.4% increase.

Treasuries were higher, as the yield on the 2-year note was down 2 basis points (bps) at 0.09%, the yield on the 10-year note declined 6 bps to 0.50%, and the 30-year bond rate decreased 7 bps to 1.18%.

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