Markit manufacturing PMI rises to 8-month high

Markit Economics' manufacturing purchasing manager's index for July came in at an eight-month high of 52.9, as expected.

Markit's report showed that the sector had a strong start to the third quarter.

Demand picked up in foreign markets, helping export sales rise at the fastest pace since September 2014. Additionally, job creation rose at the strongest rate since July 2015.

The advance estimate of second-quarter GDP on Friday showed that a slowdown in business spending and a paring down of inventories slowed the economy's growth. Nonresidential fixed investment, on things like factories and machinery, fell for a third straight quarter, by 2.3%.

At 10 a.m., ISM will release its manufacturing index, forecast at 53, down a blip from 53.2 in June, which was the highest level in over a year.

Both reports are based on surveys of purchasing managers, and are expected to show that the manufacturing sector is still in expansionary territory since the indexes are above 50.

The sector continues to be challenged by a strong dollar and weak global growth, although it has pulled out of the worst depths of its slowdown from mid-2015.

Here's Wells Fargo's Sam Bullard: "On balance, regional manufacturing indices improved in July, supporting our continued expansionary call. As we have noted before, the sentiment has run well ahead of actual "hard' shipments and orders data, which continue to struggle as highlighted in last week's June durable goods orders report."

More to come ...