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ISM Manufacturing Comes At 55.5, Lowest Since December 2009, Better Than Expectations
The PMI came in at 55.5, a smidge better than expectations of 54.5, yet worse than June's 56.2, and the lowest since December 2009, yet expectations set by a roundtable of Ph.D.'s are all that matters. Among the various indices, New Orders came in at 53.5 versus 58.5, the lowest since Junr 2009, while both Employment and Prices Paid came in better than before at 58.6 and 57.5 respectively. Deterioration was also spotted in Production, Backlog of Orders, and Imports. Yet this seemingly "better than expected" report was overshadowed by the sampling of negative responses:"Business in July was strong, the best month since October 2008." [don't tell this to Arcelor-Mittal] (Fabricated Metal Products), "Slow economy has killed sales for new equipment orders." (Machinery),"Quoting activity and sales are slow, and backlog is dropping." (Computer & Electronic Products),"Business continues to be sluggish and has fallen slightly as the economic ills continue." (Nonmetallic Mineral Products),"Retailers are still unwilling to gamble on inventory." (Printing & Related Support Activities).
(Tempe, Arizona) — Economic activity in the manufacturing sector expanded in July for the 12th consecutive month, and the overall economy grew for the 15th consecutive month, say the nation's supply executives in the latest Manufacturing ISM Report On Business®.
The report was issued today by Norbert J. Ore, CPSM, C.P.M., chair
of the Institute for Supply Management™ Manufacturing Business Survey
Committee. "Manufacturing continued to grow during July, but at a
slightly slower rate than in June. Employment, supplier deliveries and
inventories improved during the month and reduced the impact of a
month-over-month deceleration in new orders and production. July marks
12 consecutive months of growth in manufacturing, and indications are
that demand is still quite strong in 10 of 18 industries. The prices
that manufacturers paid for their inputs were slightly higher but
stable, with only a few items on the short supply list."
PERFORMANCE BY INDUSTRY
Ten of the 18 manufacturing industries are reporting growth in July,
in the following order: Plastics & Rubber Products; Miscellaneous
Manufacturing; Paper Products; Electrical Equipment, Appliances &
Components; Transportation Equipment; Primary Metals; Textile Mills;
Computer & Electronic Products; Fabricated Metal Products; and
Chemical Products. The four industries reporting contraction in July
are: Nonmetallic Mineral Products; Furniture & Related Products;
Food, Beverage & Tobacco Products; and Machinery.
WHAT RESPONDENTS ARE SAYING...
- "Business in July was strong, the best month since October 2008." (Fabricated Metal Products)
- "Slow economy has killed sales for new equipment orders." (Machinery)
- "Quoting activity and sales are slow, and backlog is dropping." (Computer & Electronic Products)
- "Business continues to be sluggish and has fallen slightly as the economic ills continue." (Nonmetallic Mineral Products)
- "Retailers are still unwilling to gamble on inventory." (Printing & Related Support Activities)
| MANUFACTURING AT A GLANCE JULY 2010 |
||||||
|---|---|---|---|---|---|---|
|
Index |
Series Index July |
Series Index June |
Percentage Point Change |
Direction |
Rate of Change |
Trend* (Months) |
| PMI | 55.5 | 56.2 | -0.7 | Growing | Slower | 12 |
| New Orders | 53.5 | 58.5 | -5.0 | Growing | Slower | 13 |
| Production | 57.0 | 61.4 | -4.4 | Growing | Slower | 14 |
| Employment | 58.6 | 57.8 | +0.8 | Growing | Faster | 8 |
| Supplier Deliveries | 58.3 | 57.3 | +1.0 | Slowing | Faster | 14 |
| Inventories | 50.2 | 45.8 | +4.4 | Growing | From Contracting | 1 |
| Customers' Inventories | 39.0 | 38.0 | +1.0 | Too Low | Slower | 16 |
| Prices | 57.5 | 57.0 | +0.5 | Increasing | Faster | 13 |
| Backlog of Orders | 54.5 | 57.0 | -2.5 | Growing | Slower | 7 |
| Exports | 56.5 | 56.0 | +0.5 | Growing | Faster | 13 |
| Imports | 52.5 | 56.5 | -4.0 | Growing | Slower | 11 |
| OVERALL ECONOMY | Growing | Slower | 15 | |||
| Manufacturing Sector | Growing | Slower | 12 | |||
*Number of months moving in current direction
COMMODITIES REPORTED UP/DOWN IN PRICE and IN SHORT SUPPLY
Commodities Up in Price
Capacitors; Corrugated Containers (5); Paper; Pulp; Steel* (13); and Titanium.
Commodities Down in Price
Machined Steel Parts; Polyethylene, Polypropylene Resins (2); and Steel*.
Commodities in Short Supply
Capacitors; Electrical Components; and Titanium Dioxide.
Note: The number of consecutive months the commodity is listed is indicated after each item.
*Reported as both up and down in price.
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Rally...this must mean more stimulus!
SP500 up almost 2%. Almost everything is up. Panic buying. WOW.
Yes...if the markets are rallying then everyone must know something I don't. QE2 must be on its way! Oh joy! I better jump on this bandwagon now before it's too late! Thank God for QE2! It's most definitely a foregone conclusion at this point.
(or will the Fed just be flashing around its QE2 bullet for an "extended period" because its the last bullet it has?)
That's gotta be good for a 180+ point shove upward on the DOW. It's just gotta be.
It's going to be fun watching the equity honks promoting this while the bond market yawns.
For those who are perpetually cheering today's rise of the S&P 500 above the 200 DMA, I would just remind them that it did this one other time recently after a "Death Cross"....May 2008.
Gee, whatever happened after May of 08...hmmm....
For those who are perpetually cheering today's rise of the S&P 500 above the 200 DMA, I would just remind them that it did this one other time recently after a "Death Cross"....May 2008.
Funny (not so much). I was very dumb money in 2008. I was told by a friend who had been bearish for some time that the 25 and 50 crossed over the 200. I brought this to the attention of my "advisor". His reply - "Technical analisys is worthless, it's all about fundamentals." The rest... is history.
"Technical analisys is worthless, it's all about fundamentals."
Those are the same people that want permanent bans on all short sales. Of course what they don't realize is that while the shorts are on summer vacation, they are filling a huge air pocket in the markets with more air.
No volume.
No retail commitment.
No reality in some of the earnings.
No monetary velocity.
It's shaping up for one more really nasty August-September swoon if not outright implosion.
Any # above 50 is good ... although 55.5 should be about 65 with all the money the .gov is dropping from skynet.
That being said, the new orders fall off is indicative of abrupt slowing which should be trended over the next couple of quarters. If that new orders metric goes below 50 ... all the rest will follow, in lock step. 2011 should be a doozy.
So does that mean the next report will be to the hundredths? 50.01 all is well, still expanding........don't mind M/M numbers...that is just semantics.
Price action is all that matters people. The price action says buy the dips. Get long and cost average in on any dip. Always you stops and money mannagment. The risk now is shorting these rallys. Thats the message from the markets.
IT'S ALL RIGGED TO THE UPSIDE.............. TILL NOVEMBER. MAKE FREE MONEY $$$$$
The equity market launches as it celebrates the fact that the ISM Index was lower than June and is the lowest reading of 2010. The S and P 500 rockets up 21+ points while the DOW living up to "no stock left behind" launches up 188+ points. The ISM Index is now officially below the reading for October 2009! Yes America a weakening economy is reason to celebrate.
ISM Index Recap
55.5 July 2010
56.2 June 2010
59.7 May 2010
60.4 April 2010
59.6 March 2010
56.5 February 2010
58.4 January 2010
55.9 December 2009
53.6 November 2009
55.7 October 2009
The Vigilant Grandpa needs the Kool-aid recipe
I think Rosie was waiting for this one. Let's see what he has to say about it. Very troublesome. If you are a trader, it seems risk on until further notice, especially given all of this pre-QE 2.0 chatter at the highest levels. If you're like me, and worried about the big picture, this report bespeaks stagnation and slow to no growth, despite herculean printing press activity. The jobs report on Friday will be a snoozer too. No relief in sight.
Well, doesn't it matter that all those Ph.D's were from reputable universities?
Volume sucks. We know how this plays out. Sometime in the near future expect a 2% drop on massive volume on bad news somewhere in the world.
Agreed... This magic carpet ride will have to end soon. If you believe in gap fills, the ES now has 2 unfilled sizable gaps just waiting to be filled (7/22 - 13.75 points, today - 10 points). And it's not the amount of points the gaps are, it's the distance from where we are at today to 7/22's fill (around 54 points). Gaps don't always get filled but this is looking suspicious.
Right, that's why volume is busting out...oh wait, it's sucking a massive dong today also. How fucking wierd.
For the longest time I was flummoxed by what the Great Bearded One (as in JC not BB) meant by "The meek shall inherit the Earth". It's starting to make more sense now...
Right, that's why volume is busting out...oh wait, it's sucking a massive dong today also.
poetic. ;-)
absolutely fantastic, although i suspect that after that many viagras a heart attack and/or stroke is probably overdue
Volume sucks b/c those afriad are not entering, and all the hedgies are either
a) on an island banging models (not the quant kind either) and doing lines while snorkeling
or
b) looking for a good shorting position.
They know the upsides are slow to climb and quick to fall.
What do you mean upsides are "slow to climb?"
WTF did you see happen last Friday and today?