To The Moon

Interconnected.

I said in my Tuesday post (click here ! to read and Repost ok. Thanks!) that there will not be any popular (eg. Jobs & Inflation) US economic reports out this week.

The other reports released (so far), still deserve a quick read or two.

This is because they help us understand what’s really going on in the US economy at the ground level and how it will impact businesses, consumers, and the stock market.

It is all a vicious cycle really, if you asked me.

US Economic Reports.

As of Wed, 06 Aug 2025, below are the reports released so far:

• Factory orders.

• Trade balance (deficit).

• S&P US services PMI (final).

• ISM services.

(1) Factory Order.

For June 2025, US Census Bureau report came in “better” than market estimates. (see below)

• US factory orders, a key indicator of health of the manufacturing sector, saw a decline. (see above)

• The latest number is -4.8%, (indicating US manufacturers received fewer new orders than May 2025) and is slightly better than the forecasted -4.9%.

• This suggest that while manufacturing sector is contracting, it is at a slightly slower pace than economists had predicted.

• However, compared to May 2025’s +8.2%, the plunge to -4.8% is a notable contraction of -13.1%.

• Decline could be due to (a) reduced demand for goods, (b) supply chain disruptions, or (c) economic uncertainty. Personally, I think it’s all of the above.

(2) Trade Balance.

US trade deficit, that shows the gap between what US imports and exports, got smaller and did better than analysts’ estimates for June 2025. (see below)

The latest number is -$60.2 billion:

• Is better than analysts’ forecast of -$62.6 billion.

• Is much better than last month’s (downwards revised) -$71.7 billion.

This means US imported less compared to what it exported, which usually helps make the US dollar stronger.

But in the process, it could make US products more expensive for buyers in other countries in the future.

it is a fact that services overwhelmingly contribute more to US GDP than manufactured goods, making up approximately 70–77% of GDP compared to manufacturing’s 10%.

Historically, manufacturing once accounted for a much larger share but has been declining for decades as the economy shifted toward services.

(3) S&P Global US Services PMI.

According to S&P Global, US service sector grew faster in July 2025, with business activity reaching its highest level in 2025, as more new orders came in. (see below)

Companies hired more workers to keep up, albeit only modestly.

However, Trump’s tariffs made costs go up, leading to higher prices for both what businesses pay and charge.

The S&P Global US Services PMI rose to a 7-month high of 55.7 in July, up from June’s 52.9. (see above)

Latest readings showed the service sector expanded ‘markedly’ in July 2025, continuing a growth streak that has lasted 2½ years.

(4) ISM Services PMI.

Separately, U.S. services sector activity unexpectedly flatlined in July with

Conversely, the Institute for Supply Management (ISM) Non-manufacturing PMI reported a less than vibrant report for July 2025. (see below)

On Tue, 05 Aug 2025, ISM Non-manufacturing PMI came in at 50.1 vs economists’ forecast of 51.5 vs June 2025 ’s 50.8.

The unexpected flatlined performance could be attributed to (a) little change in orders and (b) further weakening in employment even as input costs climbed by the most in nearly 3 years, underscoring the ongoing drag of uncertainty over Trump's tariff policy on businesses.

*Note - a PMI reading above 50 indicates growth in the services sector, that accounts for more than ⅔ (or 67%) of US economy.

Sidetrack.

Just to share that, it is not an apple-to-apple comparison on reports by S&P Global and Institute of Supply Management (ISM).

• The S&P Global Services PMI focuses on private sector companies only.

• While the ISM Non-Manufacturing PMI covers a broader range of industries, including government and construction.

• ISM also survey different types of company representatives and use different methods for data collection and seasonal adjustments, leading to variations in their readings.

The differences in (i) scope, (ii) respondents, and (iii) methodology explain why their July 2025 results differ.

My viewpoints: (mine only)

Collectively, above 4 reports indicate that US businesses and economy are facing mixed but overall, weak signals amid newly inked trade deals to be rolled out from August 2025.

Together, they reveal a still growing US economy but at decelerating pace.

Both tariff-related inflationary pressures and weaker manufacturing demand signal risk of an imminent slowdown in H2 2025 as tariff impacts deepen.

Should investors reduce exposure to volatile stocks, increase cash or defensive holdings like $Utilities Select Sector SPDR Fund(XLU)$ and $Consumer Staples Select Sector SPDR Fund(XLP)$ ? All of us have to dig deep to honestly recognize our unique risk profile ?

Remember to check out my other posts. (See below). Help to Repost ok, Thanks.

Must Read: Click on below titles to access. Repost to share, Like as encouragement ok. Thanks.

• Novo Nordisk - Dun buy yet OR Just dun buy ? Wed, 06 August. Pick post.

• $PLTR : A Billion-revenue AI Stock. Buy ? Wed, 06 August. Pick post.

• Jobs Report Is In. What's Next for the Fed ? Tue, 05 August. Pick post.

• Do you think if it is possible that inflation returns yet, US market remains financially ‘strong’ ?

• Do you think that utilities & consumer staples are the way to go, faced with a falling economy and stock market?

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