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New orders for U.S.-manufactured goods increased solidly in June and business spending on equipment was stronger than initially thought, pointing to underlying strength in manufacturing despite rising interest rates, Reuters reported. The Commerce Department said on Wednesday that factory orders rose 2.0% in June after advancing 1.8% in May. Manufacturing continues to grow, though its momentum has slowed as higher interest rates cool demand for goods. Spending is also reverting back to services. An Institute for Supply Management survey on Monday showed factory activity growing at a moderate pace in July, with a measure of new orders declining further as manufacturers worried about excess inventory. The increase in orders occurred nearly across the board in June. Some of the rise reflected higher prices. Orders for computers and electronic products surged 1.7%. Orders for electrical equipment, appliances and components rebounded 2.8%. There was also a 5.2% jump in orders for transportation equipment, which reflected a surge in orders for defense aircraft and parts. But orders for primary metals fell 1.0%.

Shares of beauty-products maker Revlon Inc. have more than doubled since it won court approval to take out $1.4 billion in financing to carry itself through bankruptcy, WSJ Pro Bankruptcy reported. Revlon stock reached $10.74 a share in early trading yesterday before closing at $8.89, indicating market faith that the company’s equity still has value despite its latest borrowing. Shareholders typically walk away empty-handed in bankruptcies, but a run-up in Revlon shares after its bankruptcy filing in June has some wondering if it could be the next Hertz Global Holdings Inc., which paid out roughly $1 billion in equity value through its chapter 11 case last year. Tuesday’s rally, which lifted the stock from around $5 last week, followed a decision by Judge David Jones of the U.S. Bankruptcy Court in New York to grant final approval for a loan package designed to keep Revlon afloat while it looks at restructuring options. The rally seemed to ignore that Revlon’s new loan puts additional debt on the company that must be repaid ahead of equity. Revlon watchers said the run-up could reflect positive market sentiment that the restructuring process is moving forward.

American Dream, the $5 billion mall and entertainment complex in New Jersey’s Meadowlands, failed to make an interest payment that was due Monday on municipal bonds sold to help finance the venture, Bloomberg News reported. The more than 3 million-square-foot destination mall, which features an indoor ski slope, amusement park and water park, did not make an $8.8 million payment that was due, according to a regulatory filing. “The trustee has not received any revenues for payment of the August 1 debt service, and the reserve account does not have sufficient funds to make such payment,” the filing said. About $290 million of muni debt issued for American Dream is backed by New Jersey economic development grants based on sales-tax collections. As of early July, New Jersey’s Economic Development Authority hadn’t approved documents certifying project expenditures by the developer Triple Five Group. Those documents are needed to release the grants. Failure to make a payment on the so-called grant-revenue bonds doesn’t constitute a default nor does it require the borrower to pay back the loan immediately, according to bond documents. Bonds maturing in 2027 with a 6.25% coupon traded at about 91 cents on the dollar June 30, while debt with a 6.75% coupon maturing in 2031 traded at about 82.4 cents.

Revlon Inc. received a U.S. bankruptcy judge's permission yesterday to proceed with a $1.4 billion loan, over an objection by junior creditors who argued that its onerous terms could block their chance to recover anything from the cosmetic company's bankruptcy, Reuters reported. U.S. Bankruptcy Judge David Jones in Manhattan ordered modifications to the loan in response to the junior creditors' concerns, but said Revlon must be allowed to borrow the cash it needs to continue its operations in bankruptcy. Revlon filed for chapter 11 in June, saying its $3.5 billion debt load left it too cash-poor to make timely payments to critical vendors in its cosmetics supply chain. To shore up its supply chain and fund its bankruptcy court case, Revlon sought additional financing from a coalition known as the BrandCo Lenders, which had loaned Revlon $1.88 billion in the years before it filed for bankruptcy. Judge Jones allowed Revlon to borrow $375 million at the start of the bankruptcy. Friday's unlocks between $200 million and $1.05 billion in additional funds, some of which would be used to pay Revlon's existing debts to BrandCo lenders. The judge's approval also commits Revlon to non-financial conditions, including a schedule for exiting bankruptcy by April 2023 on terms favorable to the lenders. Judge Jones ordered some changes to the loan agreement, giving Revlon more time to propose a restructuring plan and giving junior creditors more authority to bring lawsuits on Revlon's behalf.

U.S. manufacturing activity slowed less than expected in July and there were signs that supply constraints are easing, with a measure of prices paid for inputs by factories falling to a two-year low, suggesting inflation has probably peaked, Reuters reported. While the Institute for Supply Management survey on Monday showed a measure of factor employment contracting for a third straight month, Timothy Fiore, chair of the ISM Manufacturing Business Survey Committee, noted that "companies continue to hire at strong rates, with few indications of layoffs, hiring freezes or headcount reduction through attrition." The better-than-expected ISM reading suggested that the economy was not in recession despite a decline in gross domestic product in the first half of the year. Businesses, however, are sitting on excess inventories after ordering too many goods because of worries about shortages, depressing new orders. "The post-pandemic inventory restocking cycle is winding down amid softening consumer goods demand," said Pooja Sriram, an economist at Barclays in New York. "This intensifies risks of a harder landing in the manufacturing sector later this year. That said, the overall PMI would still need to decline a fair bit to reach readings consistent with outright economic recession." The ISM's index of national factory activity dipped to 52.8 last month, the lowest reading since June 2020, when the sector was pulling out of a pandemic-induced slump. The PMI was at 53.0 in June. A reading above 50 indicates expansion in manufacturing, which accounts for 11.9% of the U.S. economy.

Consumer spending jumped in June as Americans continued to absorb stubbornly high prices on groceries, gasoline and other basic needs. But the mood of these shoppers remained quite gloomy, potentially signaling that a broad pullback could be on the horizon, the Washington Post reported. Two data points released Friday — in a week brimming with economic markers — illustrate how the behavior of American consumers has neared a tipping point heading into the second half of the year. Overall consumer spending climbed a healthy 1.1 percent in June, the Bureau of Economic Analysis reported Friday, a significant uptick from the 0.2 percent recorded in May. That increase came during a month when gas prices surged past $5 per gallon in many parts of the country and the consumer sentiment index — as measured by the University of Michigan — reached a record low of 50. As gas prices receded somewhat in July, consumer sentiment ticked up to 51.5, a marginal improvement but still the index’s second-lowest level. Whether this is the beginning of a slow rebound or a minuscule blip is unclear. When consumer sentiment is low, many Americans can be compelled to pull back on spending. That is the type of behavior that can pull an economy into a recession. And consumer sentiment hasn’t been this low in recent history, even during recessions.

A shortage of vehicles at dealers due to the supply chain snarls gripping automakers is expected to drive down U.S. auto retail sales in July, according to industry watchers, Reuters reported. Total new-vehicle sales including retail and non-retail transactions are expected to decline 5.7% this month from a year earlier after adjusting for total selling days, consultants J.D. Power and LMC Automotive said in a report on Wednesday. Research firm Cox Automotive predicted a 13% fall in July sales volume. Automakers have struggled with supply chain disruptions caused by the COVID-19 pandemic, including those resulting from recent lockdowns in China, with Russia's invasion of Ukraine exacerbating the problem. While the consultants expect the seasonally adjusted annualized rate (SAAR) for total new-vehicle sales in the country to decline by 0.9 million units in July to 13.7 million units, Cox Automotive is forecasting a slight uptick in SAAR to 13.2 million units. The industry, which has to compete for limited chip supplies with other manufacturers such as electronics device makers, will continue to be constrained by procurement, production and distribution challenges in August, said J.D. Power and LMC Automotive.