Today the Conference Board released its July report on the Composite Indexes of Leading, Coincident, and Lagging Indicators.

The composite index of leading indicators (LEI) increased 0.2 percent in July to 103.1. This followed increases of 0.5 percent in June and 0.2 percent in May. Over the six months from January to July, the index increased 2.7 percent. During that six-month period, all eleven leading indicators advanced.

Six of the eleven leading indicators rose in July. The most significant increases--in order from the largest positive contributor to the smallest--were change in sensitive materials prices, average weekly initial claims for state unemployment insurance, manufacturers' new orders of consumer goods and materials, and contracts and orders for plant and equipment. The most significant negative contributors were average factory workweek, stock prices, and vendor performance (slower deliveries diffusion index).

The composite index of coincident indicators (CEI) edged up by 0.1 percent in July to 121.1 This followed increases of 0.3 percent in June and 0.5 percent in May. So, over the near term, it looks like the rate of increase is slowing. Over the six months from January to July, the index increased 2.0 percent.

The most-recently-reported figures for two of the four CEI components--employees on nonagricultural payrolls and industrial production--increased. The most-recently-reported numbers for personal income less transfer payments and manufacturing and trade sales declined.

The composite index of lagging indicators increased 0.6 percent in July to 103.0. Based on revised data, the lagging index held steady in June and increased 0.2 percent in May.

The next release of data on the composite indexes is scheduled for Tuesday, October 1.

In other news today, the National Association of Purchasing Management (NAPM) released the value of its Purchasing Managers' Index (PMI) for August. From July to August the PMI rose from 50.2 to 52.6, right in line with analysts' expectations. A reading of 50.0 indicates that the manufacturing sector of the economy is at a standstill. So, today's reported number indicates a slight month-to-month improvement; but, is hardly indicative of a manufacturing boom.

The rise in the NAPM number was nothing like the jump in the Chicago purchasing managers' index, from 51.2 to 60.0, reported last week. I said it before, and I said it last week, that investors should wait and see what the NAPM report has to say before drawing any conclusions about the general state of the manufacturing sector. Once again, that was the prudent approach to take. But, it wasn't the approach taken by bond traders last week.

One thing has become clear to me in my year of writing these daily columns. Daily gyrations in the markets are often due to market participant reactions to incomplete and/or uncertain economic data. They ought to know better than to do that. The facts are available to anyone who cares to make the effort to seek them out.