Cons Disc up most among S&P sectors; Materials biggest laggard
Euro STOXX 600 index ~flat
Dollar gains; U.S. crude up >2%; gold down >1%; bitcoin off >3%
U.S. 10-year Treasury yield rises to ~4.73%
UMich sentiment, employment costs and Chicago PMI
Investors staggered toward the finish line of an eventful week with three fairly upbeat economic reports to top it off.
The University of Michigan's (UMich) second and final take on July consumer sentiment USUMSF=ECI showed the mood among consumers is a tad less dire than originally reported.
The index was upwardly revised by 0.8 points to 55.2, 1.2 points north of consensus.
That's an 11.5% improvement over June's final number and the sunniest final reading since February, before the United States and Israel declared war on Iran and dragged consumer sentiment to its lowest reading in history.
Survey participants' assessments of present conditions were lowered by a near-imperceptible 0.2%, but near-term expectations were upwardly revised by 2.6%, even as the widening conflict in the Middle East continued to put upward pressure on energy costs.
"Broad-based improvements were seen across all groups by income, education, wealth, age, and political party," writes Joanne Hsu, director of UMich's consumer surveys. "Despite recent gains, sentiment is 11% below a year ago, reflecting a generally somber view of the economy amid five years of elevated inflation and persistent high prices."
"Consumers remain focused on pocketbook issues like purchasing power, while political or military developments remain more in the background," Hsu adds.
The inflation expectations element held firm. Respondents still expect annual price growth of 4.2% a year from now, or 1.6 percentage points hotter than the most recent core CPI reading.
Longer-term, consumers predict annual inflation of 3.3%, a repeat of UMich's initial take.
Separately, the Labor Department released its employment cost index USEMPC=ECI, which rose by 0.9% in the second quarter on a quarterly annualized basis, a repeat of Q1's growth rate and a shade warmer than the 0.8% economists anticipated.
Wages and benefit costs grew by 0.9% and 1.0%, respectively, marking a slight acceleration of the former and a cooldown in the latter.
This report—in combination with next week's JOLTS, jobless claims, ADP and Challenger layoffs—is prologue to the Labor Department's July employment report due a week from today, which is expected to show the U.S. economy added 80,000 jobs this month, with the unemployment rate inching back up to a still-low 4.3%.
"The big picture remains that the cooling in the labor market late last year and the early part of this year continues to bear down on wage growth," writes Oliver Allen, senior U.S. economist at Pantheon Macroeconomics. "The lack of any clear evidence of excess inflationary pressure from wages argues for keeping policy on hold for the time being."
Finally, Midwest factory activity unexpectedly accelerated this month.
The Chicago purchasing managers' index (PMI) USCPMI=ECI added 0.9 points to print at 57.6, or 1.6 points stronger than the 56.0 economists expected.
A PMI reading above 50 indicates activity expanded compared with the previous month.
On Monday, the Institute for Supply Management (ISM) is due to unveil its broader, nationwide PMI reading for July, which is seen picking up a bit of steam, ticking up 0.3 points to 53.6.
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