KEY POINTS:

• S&P 500, Nasdaq, Dow turn higher
• Real estate is weakest S&P 500 sector; industrials leads gainers
• Euro STOXX 600 index off edges up ~0.1%
• Dollar edges down; gold, bitcoin down ~0.5%; crude up >1%
• U.S. 10-Year Treasury yield rises to ~4.29%

EMPIRE STATE: BEEN DOWN SO LONG, IT LOOKS LIKE UP TO ME

The circumstances for New York State factories has grown a shade less dire in June.

The New York Fed’s manufacturing index, (d.b.a. Empire State) (USEMPM=ECI) delivered a reading of -6, an improvement over May’s -15.6 and not quite as grim as the -9 print analysts were expecting.

An Empire State reading below zero indicates a monthly contraction in factory activity.

On the bright side, it was the least bleak the index has been since February. That’s cold comfort, considering it’s been in contraction territory for seven months now.

Looking under the hood, the new orders segment improved and the outlook for future business conditions surged to a cheery reading of 30.1.

But the employment components worsened, and capex plans look “sluggish,” according to the press release.

“Manufacturing conditions remained weak in New York State in June,” writes Richard Deitz, economic research advisor at the NY Fed. “Employment continued contracting, and capital spending plans remained flat.”

“Despite lackluster conditions, optimism about the six-month outlook rose to its highest level in over two years,” Deitz adds.

Demand for manufactured goods – particularly for big-ticket durable goods – has been pressured by high interest rates, which have prompted consumers and businesses to postpone their spending on such items.

The Institute for Supply Management’s new orders index showed a steepened contraction in May and the most recent take on GDP showed consumer spending on goods actually detracted a net 40 basis points from first-quarter GDP.