Chicago PMI Misses Expectations, Plunges From Prior Print... Futures Surge
The Chicago August PMI just came out at a new 2010 low of 56.7, missing expectations of 57.0, and a plunge from the prior read 62.3. The decline was across all key subindices, with Employment (55.5), New Orders (55.0), Prices Paid (57.2), and Production (57.6) all coming in below the prior prints. And yes, this was a miss, which makes it a little odd and embarrassing trying to explain to dramatic surge in the AUDJPY (and its derivative, stocks) the second this number hit the tape: almost as if someone will do anything in their power to prevent a plunge in the market on this day of ongoing weak data, especially since the NY ISM came in at a one year low earlier, confirming the double death of the economy.
AUDJPY reaction to disappointing news. Someone explain this to us... and to Brian Sack, who seems to consistently confuse the buy and sell (lol) buttons.
From DJ on NY ISM:
"NEW YORK, Aug 31, 2010 (Dow Jones Commodities News Select via Comtex) --New York City business activity continues to slip further in August from its May blazing pace, according to a report released Tuesday.
The Institute for Supply Management-New York's Current Business Conditions index fell to 55.6 from 59.4 in July. It was the lowest reading since 54.5 in August 2009 and well below the 89.9 hit in May.
An index reading above 50 indicates a faster pace of activity and less than 50 indicates a slower or contracting rate.
The report also showed businesses scaling down their expectations. The Six-Month Outlook index fell to 58.4 from 69.6 in July.
The subindexes were weak. The ISM-NY's employment index fell to 50.0 from 51.5, and its purchasing volume index slowed to 54.3 from 59.4. The Prices Paid index fell to 43.2 from 48.5.
As with other economic reports, the ISM-NY numbers are decidedly weaker than reports earlier in the year. The disappointing numbers point to U.S. economic growth far slower in the second than in the first, when real gross domestic product grew at an annual rate of about 2.6%.
For its special monthly question, the ISM-NY asked about access to financing. The results showed working capital shortages remain a concern. Among the respondents reporting a problem, 12% face difficulty obtaining financing, 40% have shortfalls in revenues, 12% say the cost structure was too high and 21% cite all three reasons. The report said 40% of firms were not experiencing working capital shortages--a sharp improvement from 21% saying so in August 2009."