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Services ISM Prints At 57.3, Worse Than Consensus Of 59.5

Tyler Durden's picture





 

While the services PMI dropped from 59.7 to 57.3, well below expectations, the broad Business Activity series plunged from 66.9 to 59.7 The surging inflationary Price Paid series dropped from 73.3 to 72.1, or back to January's level. New Orders and Employment also declined from 64.1 and 53.7, from 64.4 and 55.6 respectively. The only growing components were Backlog of Orders rising 4.0 to 56.0, New Export Orders up 2.5 to 59.0 and Inventory Sentiment up 9.5 to 67.0, which the Surve classifies as "Too High" - this means liquidations are imminent. Hope you have your FIFO on.

Nothing too surprising in the always informative respondents' section - everyone is terrified of inflation and supply chain disruptions.

  • Business is steady. Very concerned about high fuel costs and the
    speed of any Japanese recovery
    ." (Agriculture, Forestry, Fishing &
    Hunting)
  • "Housing market still slow getting started. Freight costs going higher. Prices moving up." (Wholesale Trade)
  • "Business activities remain about the same, but the increase in
    fuel costs has made both a direct and indirect impact
    ." (Public
    Administration)
  • "Occupancy continues to increase compared to last year by about 3 percent." (Accommodation & Food Services)
  • "The catastrophe in Japan is severely affecting supply chains for
    magnetic media
    ." (Management of Companies & Support Services)
  • "General state of business has improved slightly over the prior
    month. There seems to be an increase in qualified customers."
    (Construction)

Full report

 


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Tue, 04/05/2011 - 10:04 | Link to Comment unwashedmass
unwashedmass's picture

 

could we please ask the Fed to name the companies it surveys for input costs so that all of us facing weekly increases in input costs could take our business to them?

Tue, 04/05/2011 - 10:04 | Link to Comment LawsofPhysics
LawsofPhysics's picture

I agree.  My input costs on material (not labor) are up 30% YoY.

Tue, 04/05/2011 - 10:12 | Link to Comment Sudden Debt
Sudden Debt's picture

That's about righ here also. We did 3 price increases to our clients of 15% in 18 months on material AND labor costs.

Tyler already posted a article a few months ago about the margin squeeze in the retail sector where franchisers are forced to sell at a loss in order to kill competition. But once that battle is over, ALL costs will be transfered to the consumers.

That battle is about to end this summer.

 

Tue, 04/05/2011 - 10:33 | Link to Comment Cash_is_Trash
Cash_is_Trash's picture

Inflation in Brazil is well above the gov't stated 6%.

The Real is so damn overvalued, the economy is beginning to overheat albeit in a sustainable fashion.

Higher interest rates here we come! With a concommitant rise in PM's no doubt.

Tue, 04/05/2011 - 10:04 | Link to Comment 99er
Tue, 04/05/2011 - 10:05 | Link to Comment Wm the Shrubber
Wm the Shrubber's picture

And yet CNBC has made sure to point out that the decline is coming off of a "5-year high" in February.  The spin knows no shame!

Tue, 04/05/2011 - 10:25 | Link to Comment Josh Randall
Josh Randall's picture

As long as Liesman can afford the buffet at Shoneys - all is fine

Tue, 04/05/2011 - 10:31 | Link to Comment Hard1
Hard1's picture

Bullish, definitively bullish. Buy anything, buy everything.

Tue, 04/05/2011 - 10:06 | Link to Comment Careless Whisper
Careless Whisper's picture

no impact on LULU or NFLX or ANF which penetrated new highs

Tue, 04/05/2011 - 10:05 | Link to Comment Michael66
Michael66's picture

Toyota announced all factories are to be closed because of radiation. 

There are a lot of Toyotas and Lexus cars out there which are not going to get repair parts when something breaks.

If I owned some Toyota parts I would immediately double or triple the price. I see a black market in Toyota & Lexus parts heading our way.

If I owned a Toyota or Lexus I would be concerned. 

Tue, 04/05/2011 - 10:10 | Link to Comment assumptionblindness
assumptionblindness's picture

Link, please?  Toyota announced that they would stop production because of supply issues, not "radiation."

Tue, 04/05/2011 - 10:19 | Link to Comment Sudden Debt
Sudden Debt's picture

it all sounds JAPANESE to me!

 

Tue, 04/05/2011 - 10:08 | Link to Comment RobotTrader
RobotTrader's picture

Everyday, it seems, another IBD Top 50 mo-mo screamer stock rockets up to new highs.

Insane, I've never seen speculative fever this high.

 

Tue, 04/05/2011 - 10:12 | Link to Comment Spalding_Smailes
Spalding_Smailes's picture

Check out GLUU since January 1st .... 

Kids sure do love those smartphone games ....

 

Tue, 04/05/2011 - 10:12 | Link to Comment assumptionblindness
assumptionblindness's picture

 "I've never seen speculative fever this high."

Uh oh.  Robo's don't fight the Fed paradigm is getting stress-tested. 

 

Tue, 04/05/2011 - 10:16 | Link to Comment LawsofPhysics
LawsofPhysics's picture

In robo's defense, at this point, even The Fed won't fight The Fed.  Very unsettling to say the least.

Tue, 04/05/2011 - 11:15 | Link to Comment Careless Whisper
Careless Whisper's picture

@ Spalding

Thanks. I'll put it on my radar.

 

Tue, 04/05/2011 - 10:17 | Link to Comment duo
duo's picture

Robot,

Look back at June 2000, when TI way overpaid for Burr-Brown.  Look at TI and the NAZ since then.

TI felt it could pay a 70% premium for NatSemi, probably because TI stock is similarly overvalued.  Fiat for fiat, per se.

Tue, 04/05/2011 - 10:32 | Link to Comment lieutenantjohnchard
lieutenantjohnchard's picture

you've never seen speculative fever this high because you're a newcomer to investing. the 1985 to 1987 period was just as speculative as was 1999/2000. nothing new under the sun relatively speaking. that said, being fear based keeps you in widows and orphans stocks, so you've got that going for you. still you can live vicariously through the silver and gold gains of us on this site.

btw, gentleman jim sinclair, the old scroomer as you call him, sends his regards. said he wished you would have recommended tzoo @ $12 to him rather than wait for it to go to $75 before telling him he missed the boat. oh well, he said, he advised you to buy gold at $250, but said you were too smart to listen to him.

Tue, 04/05/2011 - 11:04 | Link to Comment Kickaha
Kickaha's picture

I remember 1999.  Merrill Lynch sent me a glossy brochure touting "opportunities", one of which was a small tech company that was a "steal" at only 38 times projected estimated earnings fy 2002.

Tue, 04/05/2011 - 11:37 | Link to Comment lieutenantjohnchard
lieutenantjohnchard's picture

mary meeker and blodget. frankly, i drank some of the koolaide. barely got out in time in 2000. but still took a beating.

Tue, 04/05/2011 - 12:10 | Link to Comment DavidC
DavidC's picture

I guess we just have to wait for all those outflows over the last year to flood back in and THEN we short it...

DavidC

Tue, 04/05/2011 - 10:08 | Link to Comment Quintus
Quintus's picture

Just who is this data supposed to be relevant to?  Certainly not the upward only stock pumping Algos, whose logic, I imagine, looks something like this  

 

IF data = bad THEN GotoSubroutine "BUYStocks"

IF data = good THEN GotoSubroutine "BUYStocks"

ELSE GotoSubroutine "BUYStocks"

 

Tue, 04/05/2011 - 10:15 | Link to Comment TradingJoe
TradingJoe's picture

Relentless RampUp Continues! I am certain, whenever the "big unwind" arrives it will be epic and leave many literally penniless! I really have no more to say to this except the (Us) simply has it coming, this  much ignorance and complacency to the ongoing looting must be somehow punished, eh?!

Tue, 04/05/2011 - 10:17 | Link to Comment lizzy36
lizzy36's picture

Well those that are worried about higher input costs should take note, that Bernanke sees this phenomena as merely "transitory".

Of course Chairsatan doesn't define "transitory" so i take it to mean limit up for 12-24 months

Now let the rally commence as QE3 is back on the table until Fed minutes at 2pm.

Tue, 04/05/2011 - 10:42 | Link to Comment Raynja
Raynja's picture

He meant transitory to immortal beings like himself.

Tue, 04/05/2011 - 10:17 | Link to Comment Jay Gould Esq.
Jay Gould Esq.'s picture

"Overall inflation remains quite low."

Practical experience be damned. Three cheers for academia.

Hip-hip-hoorah.

http://www.econbrowser.com/archives/2005/10/bernanke.jpg

Tue, 04/05/2011 - 10:28 | Link to Comment alien-IQ
alien-IQ's picture

Things always look better from the expensive seats.

Tue, 04/05/2011 - 10:28 | Link to Comment Misean
Misean's picture

Your post has a hint of sarcasm, methinks. Have you not substituted iPads in your evening repast?

Tue, 04/05/2011 - 11:08 | Link to Comment Jay Gould Esq.
Jay Gould Esq.'s picture

Alas, no.

I find silicon a rather disagreeable comestible -- [ Le Cordon Bleu/Chez Goldman-trained executive chef and president of Maison Fed ] Chef Dudley's signature dish for the hoi polloi notwithstanding.

Tue, 04/05/2011 - 10:26 | Link to Comment alien-IQ
alien-IQ's picture

and that's the cue for the dollar to drop and the market to pop...ain't free markets grand?

Tue, 04/05/2011 - 10:32 | Link to Comment magpie
magpie's picture

saving on the European market morning ramps and synchronizing all efforts for the 10:30 ramp / POMO frontrunning.

HFT the dip away, boys ! And give old Bucky a punch in the groin from me !

Tue, 04/05/2011 - 10:27 | Link to Comment RobotTrader
RobotTrader's picture

Retail stocks just went apeshit.

New highs.....

Tue, 04/05/2011 - 10:32 | Link to Comment alien-IQ
alien-IQ's picture

are you chasing them? isn't the carrot pretty?

BIDU is almost at that 100xPE...you'd better hurry and get some. Because who doesn't want to own a Chinese company with the transparency of a glory hole that trades at a 100xPE? It's gonna be this summers "must have" at all the Hampton parties...Don't be left out.

Tue, 04/05/2011 - 10:38 | Link to Comment Richard Head
Richard Head's picture

He's not "chasing" anything. He has no money and no job.  All he does is spew BS all day.  Total fraud. 

Tue, 04/05/2011 - 10:33 | Link to Comment gordengeko
gordengeko's picture

If you're going to throw a junk etf chart up can you at least accompany a hottie with it?:)

Tue, 04/05/2011 - 10:55 | Link to Comment lieutenantjohnchard
lieutenantjohnchard's picture

ye olde catfish mouth still living vicariously off the gains of other investors. here's a free tip: watch the cnbs nightly shows on "how i made my millions." that'll tide you over until the next trading day for your vicariousness (new word).

btw, your vz is down 12 cents. but on the bright side mo is up 16 cents, so you've got that going for you.

Tue, 04/05/2011 - 10:28 | Link to Comment RunningMan
RunningMan's picture

What services business are surveyed as part of this release? After some activity in Feb and March, I have seen a huge drop in business activity for April.  Clients are not spending, and this wasn't related to supply chain disruptions. Combined with huge margin compression, this is going to be an ugly year.

Tue, 04/05/2011 - 10:30 | Link to Comment Spalding_Smailes
Spalding_Smailes's picture

In what industry  .... ?

Tue, 04/05/2011 - 10:29 | Link to Comment irishlink
irishlink's picture

Why is Nasdaq rebalancing index now? Is APPL about to swoon? 

Tue, 04/05/2011 - 10:40 | Link to Comment dvsteenk
dvsteenk's picture

pretty artificial ramp up in last half hour on S&P... stairway to hell?

Tue, 04/05/2011 - 10:44 | Link to Comment dvsteenk
dvsteenk's picture

almost identical to ramp at same time last Friday, 6 points in 30 minutes, in stairway fashion... how much money would I need to pull this off myself?

Tue, 04/05/2011 - 10:49 | Link to Comment gordengeko
gordengeko's picture

A lot, because the 2 week running avg on the weekly chart is now over 50% to the sellside (for volume) for the spx, spy, sdy and oef.  Last time that happened was last summer.  Keep throwing that fake fiat at it Ben, when this puppy turns kiss your but goodbye if you stop printing.

Tue, 04/05/2011 - 11:13 | Link to Comment dvsteenk
dvsteenk's picture

this fast recovery ramp must be based on fundamentals, because it is global: all currently trading indices showed a similar ramp up (DAX, CAC, S&P, DOW, etc) at about the same time. It makes sense, they are trading the same shares no?

But wait, DAX has 30, CAC has 40, S&P has 500... eh?

simply unbelievable how fake it all became...

Tue, 04/05/2011 - 12:16 | Link to Comment Johnny Lawrence
Johnny Lawrence's picture

It's not a tumor!!  (From UBS retail)

NEW! Economics (4/5) “US Economics: US Growth Dent or Growth Slump?” – Thomas Berner (bio).  The jump in the price of oil has negatively impacted real consumption growth, consumer sentiment and inflation expectations. Other US economic indicators have also disappointed recently, most prominently a weak February durable goods orders report. In contrast, labor market conditions continue to improve and business climate surveys have remained solid. In our view, the current growth weakness will be a growth dent and not a growth slump, as aggregate labor income growth is accelerating, and we expect oil prices to stabilize over a 12-month time horizon

Tue, 04/05/2011 - 12:53 | Link to Comment glenlloyd
glenlloyd's picture

Obviously UBS overlooks the huge pile of public debt hidden in the closet that's supporting the supposed 'recovery' in the US.

Tue, 04/05/2011 - 13:32 | Link to Comment jkruffin
jkruffin's picture

Question is, are they fudging the data like they did prior to QE2 to get QE3 in favor?  Seems like a repeat of last fall to me.  Everything was booming, then it wasn't?  Hmm...........

Sat, 04/09/2011 - 21:26 | Link to Comment thames222
thames222's picture

Wow, what is going on?  The American worker is dying with the dollar...we have no spending power as consumers, and our jobs are being disintegrated.  I feel bad for people who don't have an accurate understanding of what's really going on here.

 

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