Stocks tiptoed higher in early trading despite the poor factory data from Europe and declining export data from South Korea, neither which deterred U.S. investors from buying into a rapid economic recovery. Treasury yields started the day higher as they rose to close the overnight gap from last Thursday.
The Markit Manufacturing PMI for May signaled further contraction in the U.S. manufacturing sector by rising to 32.1. A monthly print below 50 indicates a decline in the factory data from the prior month.
The official ISM Manufacturing PMI rose slightly in May to 43.1 but further contracted from the prior month as a print under 50 denotes a contraction from the prior month. Employment, new orders, and prices all further contracted in May. This survey indicates there was no rapid economic recovery in May.
Construction spending fell -2.9% in April and slowed to +3.0% from this time last year.
Stocks closed higher on the day but were off their intra-day highs, while Treasury yields closed higher, but couldn’t breach their Friday lows as buyers continue to hold the line.