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ISM 60.8 On Expectations Of 58.0, Priced Paid Smash To Two Year High Of 81.5, Respondents Lament Weak Dollar

Tyler Durden's picture





 

The January ISM Manufacturing M/M 60.8 vs. Exp. 58.0 compared to the previous print of 58.5. Yet the key metric that everyone is focusing on is the surging Price Paid number, which hit a 2 year high 81.5 (73.5 expectations): the highest since July 31, 2008! The corporate margin collapse is about to cripple Q1 numbers, and at this point it is only a matter of time before even sell-side analysts are forced to aggressively lower their S&P EPS estimates.

Other metrics:

  • New Orders: 67.8 vs. Prev. 60.9
  • Employment: 61.7 vs. Prev. 57.5

And despite the strong number, the responses in the ISM were decidedly gloomy, with a lament on the dollar.

  • "Continued weakness in the dollar is having a negative effect on
    the components we purchase overseas and increasing our material costs."
    (Transportation Equipment)
  • "Lead times are increasing significantly, and commodity pricing is starting to increase." (Chemical Products)
  • "January/February sales will be decent, and we see a strong March.
    We're cautiously optimistic but reluctant to hire." (Fabricated Metal
    Products)
  • "Business is still slow with no pick-up in sight." (Furniture & Related Products)
  • "We continue to see unexpected strength in many non-U.S. markets." (Fabricated Metal Products)

And here is a chart of the Prices Paid vs 10 years. One upon a time these correlation.

Full report

 


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Tue, 02/01/2011 - 11:06 | Link to Comment slow_roast
slow_roast's picture

Hahah...markest selling off gold and silver on this excellent news of PRICES PAID inflation!  YAY!

Tue, 02/01/2011 - 11:09 | Link to Comment papaswamp
papaswamp's picture

Hope they sell big time....I'm in the mood to buy more...but gold is still too high for me. 

Tue, 02/01/2011 - 11:12 | Link to Comment docj
docj's picture

Same here.

Tue, 02/01/2011 - 11:17 | Link to Comment hedgeless_horseman
hedgeless_horseman's picture

Very strange, indeed.  It is a topsy turvey world that makes no sense unless you are wearing tinfoil on your head, then it suddenly becomes very clear.

"They" are not having as much success in oil, as it is a much bigger market.  Whack-a-Mole will wear a central planner's ass out.

http://360digest.com/wp-content/uploads/2009/06/whack-a-mole.jpg

Tue, 02/01/2011 - 11:20 | Link to Comment HankyPankyBernanke
HankyPankyBernanke's picture

Its very clear, they whack you with a massive dump in PM's to make you think twice about jumping in long, they'll be throwing everything they have at this one I suspect.... Silver down 40pips whilst the DOW well up....seems Inflation is good for stocks and bad for PM's...welcome to the new norm..just BTFD (though not in PM's of course!)

Tue, 02/01/2011 - 11:18 | Link to Comment tmosley
tmosley's picture

Price doesn't matter.  If you quibble too much on price, you'll miss out entirely, just like all these idiots who think they are going to get gold for under $1000.  That ship has sailed.

Just BTFDYFI.

Tue, 02/01/2011 - 11:37 | Link to Comment Mark McGoldrick
Mark McGoldrick's picture

Price doesn't matter?

That is some very strong Kool-Aid that you've chugged. 

Tue, 02/01/2011 - 12:22 | Link to Comment SheepDog-One
SheepDog-One's picture

Yes he's clearly right, price does NOT matter when what youre 'pricing' in an ever more worthless DOLLAR! What does it matter that silver is $28...totaly IRRELEVANT when youre talking about dollars which the Bernank is printing to oblivion. Same for equities, at this point the equity partiers better pray equities keep rocketing up because they redeem in ever more worthless dollars...good luck with all that!

Tue, 02/01/2011 - 11:45 | Link to Comment alien-IQ
alien-IQ's picture

SPX over 1300, DOW nearing 12K, USD in freefall.

This is simply ridiculous.

Tue, 02/01/2011 - 12:00 | Link to Comment whatz that smell
whatz that smell's picture

ibm going parabolic... market value has exploded $50 billion since sept...

aapl parabolic... market value bigger by $100 billion since sept...

xom parabolic... market value up $100 billions since sept...

wealth effect, bitchez!

praise be the bernank! may he blow bubbles a thousand years!

Tue, 02/01/2011 - 12:24 | Link to Comment SheepDog-One
SheepDog-One's picture

Its ridiculous, however the TARGET of this, the avg american sheeple, knows no better than to see 'the DOW's up' and conclude 'all is well' and therefore not riot in the street although they are grumbling a bit more about gas and food shooting up. So far, the sheeple remain calm, and thats the central banksters only real concern for now.

Tue, 02/01/2011 - 11:07 | Link to Comment Racer
Racer's picture

there was a headline earlier saying talk of 60.5, who knew?

Tue, 02/01/2011 - 11:07 | Link to Comment egdeh orez
egdeh orez's picture

btfd!

Tue, 02/01/2011 - 11:08 | Link to Comment oogs66
oogs66's picture

its the 1st day of the month - stocks 'must' go up.  So it is written, so let it be done!

Tue, 02/01/2011 - 11:08 | Link to Comment Id fight Gandhi
Id fight Gandhi's picture

Dollar at November lows. Market will close up. Same ol.

At least we can profit from flipping on days like this.

Tue, 02/01/2011 - 11:10 | Link to Comment Id fight Gandhi
Id fight Gandhi's picture

Nice how they ignore th horrible construction data. Xhb is up on hopium.

Tue, 02/01/2011 - 11:10 | Link to Comment topcallingtroll
topcallingtroll's picture

I got junked on my blowout prediction earlier this morning. Its kinda like a blow out. We need some huge productivity gains now.

Tue, 02/01/2011 - 11:11 | Link to Comment papaswamp
papaswamp's picture

Ouch on construction spending....I'm sure it was the weather.

Tue, 02/01/2011 - 11:23 | Link to Comment Cursive
Cursive's picture

I'm begining to think that the more it snows, the more our economy and SPX grows.

Tue, 02/01/2011 - 11:55 | Link to Comment slewie the pi-rat
slewie the pi-rat's picture

 

of course, but, im sure they're still ok in FLA;  those ironworkers never mind a chilly day!

as soon as they fini w/ the reflation, tho: roses, roses, roses.

Hahaha!

Tue, 02/01/2011 - 11:11 | Link to Comment KTS
KTS's picture

My gut feeling is that the rise in new orders we've been seeing from all of these reports is due to people locking in lower prices due to their fear of future inflation.

Tue, 02/01/2011 - 11:12 | Link to Comment scratch_and_sniff
scratch_and_sniff's picture

wasn't this the plan?

Tue, 02/01/2011 - 11:13 | Link to Comment lsbumblebee
lsbumblebee's picture

Weaker dollar? No problem. Crush gold. It will make it all better.

Tue, 02/01/2011 - 11:13 | Link to Comment Mr Sceptical
Mr Sceptical's picture

I am missing patience with this insanity...

Tue, 02/01/2011 - 11:18 | Link to Comment Racer
Racer's picture

lowering eps estimates? Who cares about earnings? As long as the Fed gives free money to PDs they don't care about such fundamentals

Tue, 02/01/2011 - 11:22 | Link to Comment Oh regional Indian
Oh regional Indian's picture

NUMBers don't matter anymore.

All theories and cycles are clearly broken. And statistics are revised every single time, for the worse.

This is the rule-less, end game time. If you don't have courage of conviction, i suggest you get some fast.

Fork in the road coming up. Cannot straddle it.

ORI

http://aadivaahan.wordpress.com/2010/06/16/time-faster-now/

Tue, 02/01/2011 - 11:22 | Link to Comment RobotTrader
RobotTrader's picture

Regional banks on my screen are taking off big.

NYA on the brink of making yet another new high.

Tue, 02/01/2011 - 11:37 | Link to Comment hedgeless_horseman
hedgeless_horseman's picture

The bankers' fantasy that FASB mark-to-market would go away forever has come true.

Wave hello to little Tattoo, and Welcome to Fantasy Island!

Here are your regional banks, Robo:

http://youwerehere.files.wordpress.com/2010/06/tattoo-fantasy-island_l1.jpg

Tue, 02/01/2011 - 11:24 | Link to Comment vote_libertaria...
vote_libertarian_party's picture

Manufacturing?  In the US?

 

Isn't that about 3 factories and 20 people about now?

Tue, 02/01/2011 - 11:58 | Link to Comment gmrpeabody
gmrpeabody's picture

I may be mistaken, it happens on a regular basis, but I think I heard that we now consider fast food sales as manufacturing orders. They arrive at these figures in a similar fashion as they determine CPI.  

Tue, 02/01/2011 - 11:27 | Link to Comment pat53
pat53's picture

As Robo would say .. shorts getting "blowtorched" today .... sweeeeeett !!

Tue, 02/01/2011 - 11:28 | Link to Comment Sofa King
Sofa King's picture

The government un-officially wants a soft dollar so that our exports will be cheaper.  Unfortunatly, somebody forgot to tell the brain trust in charge that all of our exports are actually re-packaged imports. 

...has no one learn anything from the movie "Blow".  It's only a matter of time before you no longer need the middleman.

Tue, 02/01/2011 - 11:31 | Link to Comment SheepDog-One
SheepDog-One's picture

US Exports? What do you mean, the dollar itself and jobs? Those are our only 2 exports.

Tue, 02/01/2011 - 11:48 | Link to Comment Caviar Emptor
Caviar Emptor's picture

You really wanna know? 

Our 2 top exports: debt and trash. Literally. 

I'm referring to US public debt (Treasuries and munies). And a little known fact is that the No 1 export category to China is trash: in the form of scrap metal, scrap paper and lumber products and more . In fact exports of trash grew nearly 1000% from 2000-2008 

http://www.usnews.com/opinion/blogs/jodie-allen/2010/3/3/americas-bigges...

Tue, 02/01/2011 - 12:25 | Link to Comment SheepDog-One
SheepDog-One's picture

Cash fer Klunkers...was really about cargo ships headed to China with scrapped and cubed cars.

Tue, 02/01/2011 - 11:33 | Link to Comment 6 String
6 String's picture

In this surreal world of complete made-to-believe, none of the data actually matters anymore: historcially high after-tax profit margins, consumer confidence streaking higher, insider running for the exits, artificially low interest rates, computer driven market, trading on nothing but hot air is all that will matter for awhile....the POMO and SFP pump is the only game in town right now, along with constant manipulation of PM.s.

So, back the the regular scheduled show for awhile: decoupling of markets and P.M.s. The market believes the uptick in raw material costs is a sign the market is improving, which also explains the 10yr Treasury today, right?

 

Tue, 02/01/2011 - 11:40 | Link to Comment Racer
Racer's picture

But the main problem about this surreal world is that the prices matter to the poor and all this fake economy is hurting real people

Tue, 02/01/2011 - 12:49 | Link to Comment slewie the pi-rat
slewie the pi-rat's picture

 

risk ON, 6 string!

at least till friday...probably...

got defense? and i don't mean the General.

and, i just heard a rumor that the Mormons were goin to 2 years' supply in the panty...

oh, doc-tor! that shoulda been pantry...

Tue, 02/01/2011 - 11:40 | Link to Comment Caviar Emptor
Caviar Emptor's picture

Funny, I don't even need to convince anyone about biflation anymore: it's a story that sells itself with every data point released: 

-Housing prices keep on falling with predictions of years more to go (RobertSchiller)

-Real incomes dropping

-Ags, energy, industrial raws all soaring

-Every prices paid gauge outstripping prices received and major corporates complaining about margin squeezes

Your buying power will continue to get crushed. And you know who you can thank

Tue, 02/01/2011 - 12:06 | Link to Comment Dick Darlington
Dick Darlington's picture

That's called recovery for the chosen few and misery for everybody else.

Tue, 02/01/2011 - 11:44 | Link to Comment plocequ1
plocequ1's picture

ISM.. What is ISM? Is that an Apple product?  If not, Rally on.

Tue, 02/01/2011 - 12:05 | Link to Comment virgilcaine
virgilcaine's picture

Even the Economic reports are part of... AOM ALL ONE Market'..this isn't going to end well.

Tue, 02/01/2011 - 12:17 | Link to Comment plocequ1
plocequ1's picture

.

Tue, 02/01/2011 - 12:19 | Link to Comment virgilcaine
virgilcaine's picture

Strong demand for US made urinal cake! 

Tue, 02/01/2011 - 13:20 | Link to Comment pbnyc
pbnyc's picture

Anyone else notice that they "adjusted" the seasonal adjustment factors. 

With the old factors, Nov and Dec PMI were 56.6 and 57.0.

With the new factors, Nov and Dec PMI were 58.2 and 58.5. 

So according to the old series the headline number should be lower than 60.8

http://ism.ws/ISMReport/content.cfm?ItemNumber=17565&navItemNumber=12946


 

 

Tue, 02/01/2011 - 13:35 | Link to Comment Translational Lift
Translational Lift's picture

All of these Gubmnt #s are absolutely meaningless to investors.  They are only useful to the HFT black boxes until and when all the banksters and Fed manipulators are all in jail.....don't hold your breath........................

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