The $1 Trillion Infrastructure Package Boosts Markets
S&P 500 futures are gaining ground in premarket trading as traders cheer the progress on the $1 trillion infrastructure package.
Over the weekend, a bipartisan group of lawmakers managed to reach consensus on the new infrastructure bill, and early reports indicate that it may have gained support from 10 Republican senators which is necessary to pass the bill.
The new bill is focused on traditional infrastructure like roads, bridges and ports, while Democrats will later try to pass the “human infrastructure” bill which will be focused on various social needs.
At this point, the funding sources for the new bill are not clear, and senators will likely spend this week trying to reach consensus on where the money should come from.
China’s Manufacturing PMI Declines To Multi-Month Low
China has recently reported that its Manufacturing PMI decreased from 51.3 in June to 50.3 in July compared to analyst consensus of 51. This is a worrisome development for commodity bulls as it shows that manufacturing activity in the world’s main commodity consumer is slowing down.
Today, traders will also have a chance to take a look at the final reading of U.S. Manufacturing PMI report for July. Analysts expect that Manufacturing PMI increased from 62.1 in June to 63.1 in July as manufacturing activity remained strong despite the new wave of coronavirus. ISM Manufacturing PMI is projected to increase from 60.6 to 60.9.
WTI Oil Moves Lower As China’s Manufacturing Activity Slows Down
WTI oil found itself under pressure after the release of weak China’s Manufacturing PMI report. Oil traders also keep in mind that OPEC+ has started to increase its oil production from August and will continue to gradually increase its output in the upcoming months.
At the same time, it should be noted that traders are not worried about the recent increase in the number of new coronavirus cases in the U.S. and globally, and it remains to be seen whether weak data from China will have a material impact on the oil market in the upcoming trading sessions.
For a look at all of today’s economic events, check out our economic calendar.