In a negative indication for the ISM manufacturing index, the PMI manufacturing flash for July fell 2.2 points and is back below breakeven 50 at 49.5. This is a full 2.1 points below Econoday's consensus and edges out April's 49.9 for the lowest score this year. The ISM index has had its own troubles holding near the 50 line, coming in last month at a lower-than-expected 48.5. The ISM report, a major market mover, will be posted at the beginning of next month, on August 1.

The PMI services index, in substantial contrast to PMI manufacturing, is up a further 7 tenths so far this month to 56.0 to beat the consensus by a full point. This is the 18th plus 50 score and the very highest since March 2022. Forecasters will be marking up their estimates for the ISM services index which, in significant contrast to the PMI, has been struggling at the 50 line, coming in below the breakeven level in two of the last three reports, at 48.5 in June (the same score as ISM manufacturing). ISM services will be posted on the third business day of August, on August 5.

Details on the manufacturing side of today's report are headlined by what the text describes as an"especially" sharp decline in new orders. Employment also fell. In a plus, business sentiment for manufacturing respondents is on the rise in what the report says is anticipation of better demand after the presidential election.

By contrast, sentiment among services respondents, according to the report, is down on uncertainty going into the election and what the resulting policy changes could be. High inflation and high interest rates are also holding down services sentiment. Otherwise, services details this month are led by a rise in new orders.

July's report didn't breakdown price readings between manufacturing and services but noted that aggregate input prices for both goods and services rose at the slowest pace since January. The PMI composite, weighted overwhelmingly toward services, rose 2 tenths to 55.0 for the highest score since April 2022.

July's consensus for manufacturing is no change at June's 51.6 which was up 3 tenths from May. Services rose 5 tenths in June to 55.3 with the consensus at 55.0 for July. Both of these indexes have been moving higher.

The flash Composite Purchasing Managers' Index (PMI) provides an early estimate of current private sector output by combining information obtained from surveys of around 1,000 manufacturing and service sector companies. The flash data are released around 10 days ahead of the final report and are typically based upon around 85 percent of the full survey sample. The report tracks changes in variables such as new orders, stock levels, employment and prices across both manufacturing and services. Production is also tracked, defined as"production" for manufacturing and"output" for services. Results are synthesized into a single index which can range between zero and 100. A reading above (below) 50 signals rising (falling) output versus the previous month and the closer to 100 (zero) the faster output is growing (contracting). The report also contains flash estimates of the manufacturing and services PMIs. The data are produced by S&P Global.

Investors need to keep their fingers on the pulse of the economy because it dictates how various types of investments will perform. By tracking economic data such as the purchasing managers' manufacturing indexes, investors will know what the economic backdrop is for the various markets. The stock market likes to see healthy economic growth because that translates to higher corporate profits. The bond market prefers less rapid growth and is extremely sensitive to whether the economy is growing too quickly and causing potential inflationary pressures.