Monday, October 3, 2011

ISM Manufacturing Comes in at 51.6 vs Expectation of 50.5

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The gloom was so pervasive this morning that a "meh" figure of 51.6 on ISM Manufacturing was enough to lift the S&P futures nearly 10 points instantly.  Amazingly it happened just as we saw a test of that 1120 level, which has been a rock for months.  Nothing to write home about, but in the context of a doom and gloom world traders are content.

I tweeted about an hour ago

@fundmyfund $$ ISM manufacturing at 10 AM has a low bar at 50.5, so any upside surprise could reverse margin (market) short term from its perverse gloom.

S&P up 15 points now as I type, from the lows.... we'll know in a few hours how much of this is simply short covering. 

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Full report here.  New orders were flat (bad), employment ticked up 2 (good), and prices were up 0.5 (don't know if the market wants higher prices or not at this time).
WHAT RESPONDENTS ARE SAYING ...
  • "The economy continues to be a drag on our business outlook. We are trying to deal with new and additional FDA regulations which are costing significant dollars. It is hard to recoup any of these additional costs in our pricing levels without losing significant sales volumes." (Chemical Products)
  • "Market is cautious, but still steady." (Electrical Equipment, Appliances & Components)
  • "Global demand for semiconductors is down and maybe not yet 'bottomed out.' Inventory reduction activities are a priority." (Computer & Electronic Products)
  • "Still strong automotive demand." (Fabricated Metal Products)
  • "Orders remain consistent and steady — no sign of lower demand." (Paper Products)
  • "Japan supply chain issues are over, but exchange rates and raw material prices are hurting our profit." (Transportation Equipment)
  • "We sense a weakening in demand, but it is not extreme at this point." (Plastics & Rubber Products)
  • "Overall, business is improving with a measurable uptick in orders this month. Part of that is due to pre-holiday season orders." (Miscellaneous Manufacturing)
  • "Business continues to be sluggish." (Furniture & Related Products)
MANUFACTURING AT A GLANCE
SEPTEMBER 2011


Index
Series
Index
Sep
Series
Index
Aug
Percentage
Point
Change


Direction
Rate
of
Change

Trend*
(Months)
PMI 51.6 50.6 +1.0 Growing Faster 26
New Orders 49.6 49.6 0.0 Contracting Same 3
Production 51.2 48.6 +2.6 Growing From Contacting 1
Employment 53.8 51.8 +2.0 Growing Faster 24
Supplier Deliveries 51.4 50.6 +0.8 Slowing Faster 28
Inventories 52.0 52.3 -0.3 Growing Slower 2
Customers' Inventories 49.0 46.5 +2.5 Too Low Slower 30
Prices 56.0 55.5 +0.5 Increasing Faster 27
Backlog of Orders 41.5 46.0 -4.5 Contracting Faster 4
Exports 53.5 50.5 +3.0 Growing Faster 27
Imports 54.5 55.5 -1.0 Growing Slower 25
OVERALL ECONOMY Growing Faster 28
Manufacturing Sector Growing Faster 26
*Number of months moving in current direction.

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