Despite the latest Manufacturing PMI surging to four year highs, US Factory Orders unexpectedly dropped in June (-0.3% MoM vs +0.2% MoM expected). This is the second monthly decline in the headline print in a row, but orders remain up 7.4% YoY...
Source: Bloomberg
Worse still, Core Factory Orders (excluding Transports), dropped 0.4% MoM (dramatically missing expectations of a 0.4% MoM rise). This is the first monthly drop since October and biggest MoM decline since April 2025...
Source: Bloomberg
Orders Ex-Defense also tumbled 0.4% MoM, down for the second month in a row.
So while the soft survey data is positive, the hard data is deteriorating.
The reason for that is a familiar one in this bifurcated economy, as we showed from ISM's respondents...
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Green ones from AI, semiconductor, electronics and machinery firms report strong demand from AI data centers, chips and defense.
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Red ones from metals, transportation, chemicals and consumer-related sectors report weak demand, tariffs, higher costs, geopolitical risks and pricing chaos.
Simply put, the AI supply chain is booming, Defense is enthused; the re
