Global business news twenty four hours a day at Bloomberg dot Com, the radio, plus Globo LA and on your radio. This is a Bloomberg Business Flash from Bloomberg World Headquarters on Katherine Cowdery. This stock market is advancing for a fourth session, with the SMP five track for its best week since December. Investors are weighing new economic dat Empty Institute for Supply Management said that US manufacturing expanded for the fourth straight month in June as he outlook for
new orders and production improved. Separately, the Commerce Department said US construction spending fell for a second month in May, reflecting weakness in all areas of building. We took the markets every fifteen minutes throughout the trading day on Bloomberg Radio. Down Industrial average is currently up sixteen points a tenth of a percent, trading at seventeen thousand ninety seven. SMP five fundered up three points an eighth of a percent at one one. The NASTAC is hired by thirteen points
a quarter percent, trading at fifty five. West Texas Intermediate crude oil up forty cents of barrel seven eights of a percent at seventy four. Spockled up nineteen dollars twenty cents announced at and the tenure Treasury is up seven thirty seconds with the yield of one point four four percent. And that's a Bloomberg business flash. You're listening to taking stock with pim Box and Kathleen Hay's on bloom Bird Radio. US manufacturing looked like on the headline anyway, that it
had a pretty good month in June. In fact, as a Bloomberg reports today, the fastest pace of expansion in more than a year. When you look at the latest survey from the Institute for Supply Management, They're key index rose to fifty three point to last month. That's above fifty, so it's above the level that signals that manufacturing is expanding. It's up from fifty one point three in May, so
that's all good news. At the same time, the i s M had a special survey asking the purchasing managers it surveys across the country if they are concerned about Brexit, are they seeing any impact on orders for US manufactured goods and more? Joining us to dive into this very important question now, Brad Holcom, he's chairman of the Manufacturing Business Survey Committee at the I S and Brad, welcome back. Thank you very much, and happy fourth of July to
you and everyone. I will I will say thank you into you two and of course all our listends of a lovely holiday we're celebrating this weekend. I actually want to start with a special question, Brad, why did you decide to issue a special question to the people in
your survey? Well, we felt that this was potentially monumental and deserving of a special look at that question, I think it's surprised most and so we went up to our two panels, both on the manufacturing and non manufacturing side, with a series of questions related to Brexit specifically, what
did you ask them? We asked them about, uh, their their view, initial view of the net financial impact of Brexit, and then some details around what might be the areas of concerns such as financial market uncertainty, currency movement, global growth and so on. Okay, and these are we might even think it's early days too for manufacturers to see an impact, but I guess after all the volatility that we see, maybe they're concerned about that. What did you
What did they say? What is the majority of view or is there one? Well? Half a step back. The current monthly report that we'll get to was largely collected before the Brexit announcement, and so we'll talk about that later.
So this special question, the upshot of it is, when asked about the net financial impact manufacturing eight percent at a negligible impact, a slightly negative impact, seven per cent negative on the flip side, set a slightly positive impact, so on the whole negative, negligible to slightly negative in terms of financial impact. And of course, with the basic question of basic worry, I guess would be that there will be a drop in export orders because economies overseas
will be weak, and that will hurt the demand. Now, new export orders, one of the sub indexes of the I s M index, rose actually fifty three point five in June from fifty two point five in May. We also saw somewhat higher production, somewhat higher new orders, even employment. That number rose above fifty for the first time since November of last year. You know, virtually all the indexes
are pointing in the right direction. New orders you mentioned at fifty seven point zero is the highest since December of fourteen, and production at fifty four point seven is the highest since July fIF So the three indexes, including p m I, have reached highs for a year to year and a half time frame. What's driving it? I think it's building on the momentum that we've seen for
the last four to four to six months. In the case of the p m I, it's been growing consecutively for four consecutive months, new orders and production for six consecutive months each. And that follows a five month period of a down draft where the p m I was below fifty. So we turned the corner and moving forward, and it looks like we've got some some momentum here.
So Brad Stanley Fisher, who's Vice chair of the Federal Reserve, spoke today and he indicated that the FED probably needs to wait and see what the impact of briggs it is on the global economy on the US economy for it starts making any move on rates. Uh. Do you agree with that? Do you think the Fed should actually, if manufacturing is doing reasonably well, should the Fed be considering another interest rate increase this summer or this fall? Well? I agree that we all need to kind of wait
and see. Even even our special report and questionnaire gathers their initial view really in the in the early days of this situation, and we've already seen the stock market recover, so we might get a slightly different answer if we were to pull today. So the real answer is we don't know. But it could go up down our sideways in the short term. In the long term it certainly could mean, uh, you know, greater competitiveness in the UK,
throughout Europe and globally as well. So um, in terms of growth, what kind of growth does this signal your
your index of manufacturing? And next, because a lot of people been wondering if there aren't some signs of recession right now in the US economy, Well, let's let's first say that the economy has been growing for eighty five consecutive months according to our statistics and our correlations, and this year the average p m I has been fifty point eight with corresponds to two point increase in real GDP, and this month annualized at fifty two point three point
two would correspond to a three point two So we're in the two to three percent area, uh, in terms of the g d P. Brad Holcombe, thank you so very much. From the Institute for Supply Management, This is taking stock and this is Bloomberg. Puerto Rico, Yes, they are going to default. What does it mean for investors who have continued to hold Puerto Rican paper? We're going to find out coming up. This is Bloomberg.