(Chicago)

In what comes as a troubling sign for the economy, but surely one good for the likelihood of a rate cut next month, new economic data shows that US manufacturing output slipped in June. The ISM manufacturing index slipped own into the territory between expansion and contraction. Perhaps more worrying than the absolute level is the fact that the index has been dropping for three straight months. However, many were expecting a worse drop, so this data was not as alarming as expected.

FINSUM: The fact that this was not as bad as expected is actually a very bearish sign, as it shows the current expectations of the market.