NAPM Throws the Bulls A Bone

that we finally have
the July National Association of Purchasing Management (NAPM)
report, we can see how badly, or taking the-glass-is-half-full side of the
argument, how much better things are for the US economy.

The regional Chicago report was depressing in almost ever aspect, as that
indicator fell to 38 from 44.4 in June. That was the 10th consecutive monthly
drop. The National picture was similar to that of Chicago, except that most
manufacturers are enjoying lower raw material costs, which indicates a continued
deterioration of pricing power.
HOWEVER, the inventories index fell to
32.3, which is an 18-year low. Regular readers will note that I’ve been
harping on the inventories and whether they have been moving product or simply
stockpiling it. This reading indicates that we are definitely working through
the glut and that should warm the cockles of any bull’s heart.

As for the rest of the daily activity, the few thankful arbs have to be thanking
their lucky stars that the U.S. Federal Trade Commission’s staff voted 4-0 to
close its investigation of PepsiCo’s
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$14 billion purchase of Quaker Oats
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ruling cleared the way for the makers of Gatorade and Pepsi to merge and the
arbs wasted no time narrowing the massive spread between the two stocks. Quaker
Oats (OAT) shares rose $12.65 to $100.65 in mid-day trading while Pepsi shares
declined $2.63 to $44.0.