Pre-markets are lower and sinking at this hour, not quite at levels seen earlier in the week but certainly below yesterday’s close, which was up +0.75% and higher across the board. Currently, the Dow is -460 points, -0.92%, and back below 50K again — and it's performing the best of all major indexes. The S&P 500 is -1.21%, the Nasdaq has shed -514 points, -1.73% — both off all-time closing highs Thursday. The small-cap Russell 2000 is -1.63% at this hour.
While President Trump (and a cabal of high-powered CEOs like Jensen Huang and Elon Musk) flies home from meetings with President Xi Jinping and the administration of the Chinese Communist Party in Beijing, spot oil prices are climbing above $100 per barrel (/bbl) again — $104/bbl on WTI and $108/bbl on Brent crude — as the market awaits confirmation that China intends to purchase more oil from the United States, Alaska in particular. We haven’t heard that yet.
The two sides had no doubt been bantering on many important issues, such as China’s claim on Taiwan (and U.S. weapons sales to the island), the purchase of Boeing planes and American farm products like soybeans, and generally attempting to de-escalate the “trade war” between the two nations that dates back to Trump’s first term in office, 2017-2020. China is perhaps the top buyer of oil from Iran, whose ships have reportedly been allowed to exit the Persian Gulf through the Strait of Hormuz. Despite a bevy of photo ops from Trump’s visit, we don’t see much progress regarding commitments.
Empire State Manufacturing Jumps in May
One of the earliest of monthly economic reports, the Empire State Manufacturing Index for May, jumped nearly 3x consensus estimates to 19.6 this morning. This follows an unrevised +11 for April, and the biggest single-month on this metric since April of 2022. In fact, we’d spent the greater part of the last four years with negative reads on manufacturing in the state of New York. The bottom was -29.7 in January of 2024.
New orders and shipments both improved for the second-consecutive month, although we also saw worsening delivery times and supply availability. The knee-jerk assumption here is that the closed Strait of Hormuz, impactful as it is on global oil and domestic gasoline prices, is also affecting delivery and supply of key elements in the manufacturing industry.
Industrial Production & Capacity Utilization Higher than Expected
Adding to the good news on manufacturing, Industrial Production for April came in stronger than anticipated: +0.7% versus +0.2% and an upwardly revised -0.3% for March. Capacity Utilization was 30 basis points higher than projections — +76.1% from +75.8% analysts had been looking for. This follows an unrevised +75.7% reported for the previous month.
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NY Empire State Manufacturing Index Jumps in May
Pre-markets are lower and sinking at this hour, not quite at levels seen earlier in the week but certainly below yesterday’s close, which was up +0.75% and higher across the board. Currently, the Dow is -460 points, -0.92%, and back below 50K again — and it's performing the best of all major indexes. The S&P 500 is -1.21%, the Nasdaq has shed -514 points, -1.73% — both off all-time closing highs Thursday. The small-cap Russell 2000 is -1.63% at this hour.
While President Trump (and a cabal of high-powered CEOs like Jensen Huang and Elon Musk) flies home from meetings with President Xi Jinping and the administration of the Chinese Communist Party in Beijing, spot oil prices are climbing above $100 per barrel (/bbl) again — $104/bbl on WTI and $108/bbl on Brent crude — as the market awaits confirmation that China intends to purchase more oil from the United States, Alaska in particular. We haven’t heard that yet.
The two sides had no doubt been bantering on many important issues, such as China’s claim on Taiwan (and U.S. weapons sales to the island), the purchase of Boeing planes and American farm products like soybeans, and generally attempting to de-escalate the “trade war” between the two nations that dates back to Trump’s first term in office, 2017-2020. China is perhaps the top buyer of oil from Iran, whose ships have reportedly been allowed to exit the Persian Gulf through the Strait of Hormuz. Despite a bevy of photo ops from Trump’s visit, we don’t see much progress regarding commitments.
Empire State Manufacturing Jumps in May
One of the earliest of monthly economic reports, the Empire State Manufacturing Index for May, jumped nearly 3x consensus estimates to 19.6 this morning. This follows an unrevised +11 for April, and the biggest single-month on this metric since April of 2022. In fact, we’d spent the greater part of the last four years with negative reads on manufacturing in the state of New York. The bottom was -29.7 in January of 2024.
New orders and shipments both improved for the second-consecutive month, although we also saw worsening delivery times and supply availability. The knee-jerk assumption here is that the closed Strait of Hormuz, impactful as it is on global oil and domestic gasoline prices, is also affecting delivery and supply of key elements in the manufacturing industry.
Industrial Production & Capacity Utilization Higher than Expected
Adding to the good news on manufacturing, Industrial Production for April came in stronger than anticipated: +0.7% versus +0.2% and an upwardly revised -0.3% for March. Capacity Utilization was 30 basis points higher than projections — +76.1% from +75.8% analysts had been looking for. This follows an unrevised +75.7% reported for the previous month.