Philly Fed Index Hits 47.4, a 5-Year High
The Philadelphia Federal Reserve's manufacturing index surged to 47.4 in August, its highest level since April 2021, while Treasury yields rose and major
The Philadelphia Federal Reserve's manufacturing index reached 47.4 in August, its highest reading since April 2021. This surge in business activity coincides with a sharp pre-market sell-off in equities as Treasury bond yields climbed back up.
According to a report from Zacks Investment Research, the 30-year Treasury bond yield returned to 5.25%, with the 10-year at 4.71% and the 2-year at 4.19%. This contributed to pre-market declines of 440 points for the Dow Jones Industrial Average, 44 points for the S&P 500, and 250 points for the Nasdaq. Higher oil prices also pressured futures, with Brent crude at $94 per barrel and West Texas Intermediate at $87.
Labor Market Shows Continued Strength
Weekly jobless claims data presented a robust picture of the labor market. Initial claims came in at 206,000, below estimates and the lowest figure since the last week of July. Continuing claims ticked up slightly to 1.799 million, a level not seen since late June.
The source notes that the current environment remains a "low hire/no fire" labor market. It suggests that in some states, filing for unemployment may be less economically attractive than taking gig economy work with companies like DoorDash or Uber, and that Baby Boomer retirements continue to affect workforce numbers.
Manufacturing Momentum Builds
The Philly Fed's strong August print of 47.4 follows a July reading of 41.4. The index has now been positive in 11 of the past 14 quarters, marking a significant turnaround from a period of nearly consistent negative readings between June 2022 and February 2024. Zacks links the improvement to factors like data-center construction and the Chips Act.
This regional strength follows a similarly strong report from the Empire State manufacturing survey earlier in the week. For a deeper look at economic indicators, our stats page tracks these trends.
Corporate Earnings: A Mixed Bag
Major companies reported quarterly earnings with varied results. The performance of key firms is summarized in the table below.
| Company | Ticker | EPS Actual | EPS Estimate | Beat % | Stock Reaction | Key Notes |
|---|---|---|---|---|---|---|
| Walmart | WMT | $0.81 | $0.73 | +11% | -7.5% | Upped guidance; comps missed; concerns over working-class shoppers. |
| Deere & Co. | DE | $5.10 | $4.79 | +6.5% | +1.4% | Construction segment up 84%; $110M tariff refunds. |
| Advance Auto Parts | AAP | N/A | N/A | +27.2% | -18% | Missed revenue; weaker guidance. |
Chinese stocks also faced pressure, with Alibaba, NetEase, and Daqo Energy all reporting disappointing earnings and selling off ahead of the U.S. market open. Investors can monitor market standings for broader context on these movements.
The source concludes by promoting a proprietary list of seven stocks, selected from 220 with a Zacks Rank #1 Strong Buy rating, which it says have historically outperformed the market.
