After a pretty lousy week relative to expectations for US economic data last week, this week started off with more of the same as the Empire Manufacturing report for July came in below expectations. While economists were looking for the headline index to come in at 15.0, the actual reading came in a bit weaker at 9.8. Similarly, expectations for conditions six months from now also declined from 41.7 down to 34.9, which is the lowest level since right before the election. In terms of plans for Cap Ex and Technology spending, Cap Ex saw a modest decline, while plans for Tech spending were stable.

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As far as the internals of the July report were concerned, breadth was very weak.  Of the nine components in the report, just two (Prices Paid and Prices Received) saw a m/m increase, while Shipments and Unfilled Orders saw the largest declines.  For conditions six months from now, we saw a similar trend in breadth with seven m/m declines and just two increases.

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