START UP THE CYLINDERS - READY TO FIRE!

Economy - It's going to be a busy week for economic data and current news is likely to be put under the microscope more than usual in light of the rebound in economic fortunes. With the S&P 500 index accelerating past its January and June peaks nourished by signs of global healing, investors are clearly desperate to make sure they don't miss the rising tide.

The U.S. government's cash-for-clunkers program quickly ran out of juice on account of its success. Eager auto-buyers made selling a walk in the park for even for an amateur sales force courtesy of a $4,500 tax credit, while the promise of a match by automakers made the already sweet medicine taste more like honey!

Monday brings the ISM survey - a key measure of manufacturing health. Auto inventories were heavily pared in the face of weakening demand in the spring, while the early part of the summer proved to be worse as bankruptcy-bound Chrysler and GM shuttered key operations as the ink dried on court-ordered restructurings.

Analysts expect an improvement from 44.8% in June to 46.2% in July. As a diffusion index a reading below 50% indicates manufacturing contraction and as investors have become well accustomed to recently, the news is of a move off the bottom. The non-manufacturing ISM survey is due Thursday and should head once again towards neutrality with 48% for July after 47% in June What investors need to know is the permanent impact from the government's initiatives for the auto industry.

Speaking of which, automakers also report July sales data today. It may well be to early to hear news of the success of the clunker-plan, and the media seems to have a better ear to the ground, making these reports redundant. We see the impact of this report quite literally as one way traffic. The industry may well fail to report an improvement on the annualized 9.7million unit reading from June, with contracts reported in August rather than July. All indications are, however, that August will see a return to above a 10 million vehicle pace.

Construction spending should also show a lighter contraction for July at 0.6% on the month compared to a 0.9% decline reported in June.

Much trumpeting surrounded last week's initial jobless claims data because it produced an entire month of layoffs at less than the June pace of more than 600,000 per week. On Friday we look forward to the July employment report, which should show a rise to a 9.7% unemployment rate if job losses come in at 275,000 for the month. On Wednesday, the forerunner of the ADP report tentatively confirms the enthusiasm with its reading expected to show a payroll decline of 402,000 jobs, which is certainly heading in the right direction.

Wednesday should see a decline in factory orders of around 1.2%, but overall the mood should be upbeat throughout the first trading week of August. We estimate that stock markets should advance and both bonds and the dollar can be expected to feel the ill-winds of this optimism.

Which Texas-based sugar manufacturer
is set to rally 32% before year end
if the commodities markets continue to reach for the sky?
Find out in the August issue of Global Resources Alert!!

The Supreme Council of the Secret Order of Jurojin