Note: I want to apologize to all of you who sent me a note in recent weeks, either following recent finance-related posts or my short piece on our colonoscopy. We had our grand-children non-stop 
for a few weeks as well as some other obligations so my computer time was pretty restricted. Sorry for the delay but be assured that I truly appreciate your comments.
U.S. Pending Home Sales Improve
The National Association of Realtors (NAR) reported that pending home sales increased 1.5% (0.5% y/y) during June to an index level of 110.2 following declines in four of the prior five months. It was the highest in three months.
The index for the West increased 2.9% to the highest level in six months. For the South, the index rebounded 2.1% to the highest level since February. The index in the Northeast gained 0.7% following little change in May. The index for the Midwest eased 0.5% to the lowest level since January.
Eurozone manufacturing growth slows slightly at start of third quarter
The start of the third quarter saw a slight moderation in the recent strong rate of expansion of the eurozone manufacturing sector. This was signalled by the final IHS Markit Eurozone Manufacturing PMI® posting 56.6 in July, down from June’s 74-month high of 57.4 and below the earlier flash estimate of 56.8. (…)
National surveys pointed to broad-based growth, with PMI readings for all eight of the countries monitored signalling expansion. (…)
Companies benefitted from solid gains in new business from both domestic and foreign clients. Although rates of expansion in output (six-month low), new orders (five-month low) and new export business (four-month low) all eased during the latest survey month, they nonetheless remained among the best registered since the first half of 2011. (…)
The combination of rising order inflows and backlogs of work underpinned further strong job creation. Rates of increase in June and July have been close to May’s survey-record high. (…)
Price pressures showed further signs of easing in July. Input cost inflation slowed to a nine-month low, while charges rose to the weakest extent during the year so far. Apart from increased raw material prices, cost pressures also reflected a sellers’ market developing for a number of purchased goods. This was highlighted by the trend in suppliers’ delivery times, which lengthened to the greatest degree since April 2011. (…)
The survey indicates that manufacturing output was growing at an annual rate of approximately 4% at the start of the third quarter, sustaining the best growth spell that the region has seen for six years. (…)
Despite the near-record rise in employment, companies continued to struggle to meet order book growth, with capacity constraints both at factories and their suppliers becoming increasingly widespread in recent months. While price pressures eased in July, inflationary pressures could pick up again if demand continues to outstrip supply.
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Eurozone Economy Speeds Up, Boosting Case for ECB Taper Eurozone economic growth gathered pace in the three months to June, making it more likely the European Central Bank will remove some of its stimulus measures this year.
China PMI edges up to four-month high in July
Operating conditions faced by Chinese manufacturers improved at a slightly quicker pace in July. Companies indicated that both output and new orders rose at the fastest rates for five months, helped by a solid upturn in new export sales. At the same time, inflationary pressures ticked up, with both input prices and output charges rising at faster rates than in June.
However, companies maintained a relatively cautious stance towards employment, with staff numbers falling again in July. This coincided with a subdued level of confidence towards the business outlook, with optimism towards the year ahead dipping to an 11-month low.
The seasonally adjusted Purchasing Managers’ Index™ (PMI™) posted above the neutral 50.0 value at 51.1 in July, up from 50.4 in June. This signalled an improvement in the health of China’s manufacturing sector for the second successive month, following a slight deterioration in May. Though marginal, the pace of improvement was the strongest seen for four months.
The uptick in the headline index was supported by a solid and accelerated increase in total new business. Furthermore, the rate of new order growth picked up to a five-month high in July. Panellists widely commented on an improvement in market conditions and strong foreign demand. Notably, new export sales increased at the second-fastest rate since September 2014. (…)
Chinese manufacturers raised their purchasing activity for the second month running, and at a quicker rate than in June. This contributed to a renewed increase in stocks of inputs, albeit marginal. A number of companies mentioned rebuilding their inventories due to stronger client demand. Meanwhile, stocks of finished items declined slightly, as some firms commented on using current inventories to fulfil new orders. (…)
EARNINGS WATCH
As of yesterday a.m. per Thomson Reuters:
- 293 reports in, 73% beat rate, +5.8% surprise factor.
- Blended EPS growth for Q2: +10.8% on +4.9% revenue growth.
- Q3 EPS: +7.4%E (+8.6% on Jul 1), Q4: +12.4%E (+13.1%).
- Trailing 12-m EPS: $125.25
Greenspan Sees No Stock Excess, Warns of Bond Market Bubble
David Rosenberg yesterday wrote what most observers around the world think:
(…)
This was before that:
And that is, finally, something positive coming out of the White House. Let’s see if Gen. Kelly can keep control of this very strange house…and get something done. 
With Mr. Trump, it’s possible—perhaps likely—that this will be a fleeting moment of organizational discipline. The President has shown in the past that he can listen to advice for a few hours, sometimes even a few days, but inevitably he feels too confined by political normalcy and breaks free with a Twitter barrage or interview tirade. Or maybe, as a former four-star general, Mr. Kelly is the rare person outside his family whom Mr. Trump will heed. (WSJ)
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Who is John Kelly, Trump’s new chief of staff? Retired general has stood by the president’s side and gone to bat for his family