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Huge Manufacturing ISM Miss And Lowest Print Since June 2009 Sends Markets Soaring
So much for the Chicago PMI 8 Sigma renaissance. Moments ago the Manufacturing ISM came out and confirmed that all those "other" diffusion indices were correct, except for the "data" out of Chicago (yes, shocking). Printing at a contractionary 49.0, this was a drop from 50.7, well below expectations of 51.0 (and far below the cartoonish Joe Lavorgna's revised 53.0 forecast). More importantly, this was the worst ISM headline print since June 2009, the first sub-50 print since November 2012, while the New Orders of 48.8, was the worst since July 2012. Both Production and Backlogs tumbled by -4.9 and -5.0 to 48.6, and 48.0 respectively. In brief, of the 11 series tracked by the ISM, only 3 posted a reading over 50 in May. This compares to just 2 out of 11 that were below 50 in April. Oh well, so much for this recovery. But the good news for the market is that today is really bad news is really good news day, and stocks have soared as according to the vacuum tubes, the result means no taper. The farce must go on.
Visually:
And the breakdown:
From the report:
The report was issued today by Bradley J. Holcomb, CPSM, CPSD, chair of the Institute for Supply Management™ Manufacturing Business Survey Committee. "The PMI™ registered 49 percent, a decrease of 1.7 percentage points from April's reading of 50.7 percent, indicating contraction in manufacturing for the first time since November 2012 and only the second time since July 2009. This month's PMI™ reading is at its lowest level since June 2009, when it registered 45.8 percent. The New Orders Index decreased in May by 3.5 percentage points to 48.8 percent, and the Production Index decreased by 4.9 percentage points to 48.6 percent. The Employment Index registered 50.1 percent, a slight decrease of 0.1 percentage point compared to April's reading of 50.2 percent. The Prices Index registered 49.5 percent, decreasing 0.5 percentage point from April, indicating that overall raw materials prices decreased from last month. Several comments from the panel indicate a flattening or softening in demand due to a sluggish economy, both domestically and globally."
And the always gloomy respondents:
- "Customers are anticipating resin price decreases and holding back orders." (Plastics & Rubber Products)
- "Slight uptick in overall business but not substantial." (Textile Mills)
- "Government spending has tightened, which has moved out program awards and caused some reduction in force." (Computer & Electronic Products)
- "Market outlook is relatively flat, with some promise of raw materials inflation relaxing." (Electrical Equipment, Appliances & Components)
- "General economy seems sluggish and pensive. Buyers are not buying much beyond lead times." (Fabricated Metal Products)
- "Downturn in European and Chinese markets is having a negative effect on our business." (Machinery)
- "We are having a difficult time hiring skilled employees." (Transportation Equipment)
- "Business continues to increase, but over the past 20 days we have seen the trend flatten." (Furniture & Related Products)
- "Market was holding strong until mid-month — then softened." (Wood Products)
- "Decline in sales for FYQ2 over same period a year ago due to softer demand [in] both domestic and exports." (Chemical Products)
and close-up - the sub-indices are not pretty either...
New Orders 'swoon'ing again...
and Production at its lowest sicne May 2009...
and the market's "bad is good" reaction (for now)...
Charts: Bloomberg
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At least we can all shut up about the taper. Can't wait to see CNBC start pivoting to MOAR QE
I LOL'ed at the headline even though I shouldn't :)
ISM is falling. And stocks go up. Ben to the rescue!!!!! /sarc
http://confoundedinterest.wordpress.com/2013/06/02/bleeding-economic-indicators-commodities-cds-and-industrial-production/
BULLISH!!!
And leave it to Bloomberg to use the "U" word.
"Manufacturing (NAPMPMI) in the U.S. unexpectedly shrank in May at the fastest pace in four years..."
http://www.bloomberg.com/news/2013-06-03/may-ism-manufacturing-index-dec...
so it's trading at 2006 levels when the economy was booming. where's the news here?
The real good news is that the govmint doesn't need to do anything because everything is fine, stawks at all time highs and it isn't even Tuesday.
LOL!! Taper..
Taper, taper, taper...
LOL!! good luck.
I don't really see much 'soaring', the so-called supposed 'markets' are still lower than late last week.
Patience grasshoppa...Summer of Recovery '13 is only 17 days away.
I think it's gonna be more like "sore-ing". Know what I mean?
How ridiculous that Chicago PMI print at 58 was!
Anyway, people now asking for MOAAAAAAAAAR...
Sadly, this all makes perfect sense these days....
no taper? shit. i think its time to price in $3 trillion in annual printing so we can fuck the entire markets up like abe has done to japan.....
I agree. "we've got a (Federal) program for that." the problem is "it's just one program." only a growing economic recovery can save the day here. since only gold is the marginal producer of a free dollar for the consumer...
Time for Fitch to throw the Amerika another downgrade...... lets get to single B already
Bad data = Bullish
Good data = Bullish
#pomologic
Confusing data = Bullish
Insufficient data = Bullish
Misplaced data = Bullish
Revised data = Bullish
No data = Bullish
Too much data = Bullish
Contradictory data = Bullish
Confirming data = Bullish
BULLISH DATA IS BULLISH!!!
BULLISH BULLISH BULLISH BULLISH BULLISH
construction spending in the shitter too... non residential especially.
Huh? Housing is recovering so construction spending data is not real. Time to buy a house or 2 houses or 3.
taper or no taper, this is it for the "bull market". we may not see the highs reached recently for another 5-10 years.
I agree. This fake datapoint was put out there to cap yields.
Smart move. Cap yields and get the QE fueled rally.
no fake datapoint. high yield and consumer discretionary will die in the next 12 months, falling from their incredible, statistically improbable runs in the last 4 years. it's overdue. treasuries will benefit.
on a side note, france car sales continue their implosion in may, down another 10% from last year. their auto industry is dead, not even spaniards are buying citroens and peugeots anymore. france is toast, the car industry is a very good proxy for economic activity. yet, their government bonds sell as if they were still AAA. this will not last.
I wonder how much longer treasuries will benefit. Especially after we spend the summer watching the end of Japan.
sorry, not much going to happen in japan that hasn't happened in the last 20 years - much ado about nothing.
emerging market bond funds, end closer it is.
There was a story not too long ago which stated that around 2010-2011 vast quantities of $100 bills were printed and stored in warehouses. They are slated to be released to the public in October of this year. Perhaps they might buy you a loaf of bread?
Heroin seemed smart at the time. Give 'em heck Princeton! You're beautiful to me... despite the parasites...
The market was...until it wasn't. Obviously this is due to other unruly countries messing up our bling.
Fuck. That settles it. New highs soon for all stawk indices...execpt the NasCrack.
all we need now is some riots to send the s&p up a thousand, Fubar!
Need MOAR QE!
Insanity: doing the same thing over and over again and expecting ...This ism number will be thrown out the window on Friday as an anomoly when the NFP payroll is celebrated. This was just put out to cap yields. It will be forgotten soon.
Fonz the dollar was so weighted to equities, the rats can't scramble fast enough. I'm major long aud/usd. I hedged a small short going into N.Y. .9650. closed .9642. I can't wait to get confirmation on aud/jpy. That sucker is going to rocket up!
eur/aud, gbp/aud all going to be fun this month. usd/jpy will settle into a 98.50-103.00 range.
There's tons of other macro news this week Fonz, and ECB on Thursday. June gloom Bitchez. If things get really nasty, bond yields might come down, and dollar get stronger. (That will really hurt equity markets more on the export side) 2% GDP this year? LMAO
"the rats can't scramble fast enough."
I know one that made it out already and won't be in Jackson hole. He jumped out the back.
http://www.youtube.com/watch?v=MYtjpIwamos
Even as the deck chairs begin to slide few have noticed the list.
Regarding the respondents:
"Slight uptick in overall business but not substantial." (Textile Mills)
"Business continues to increase, but over the past 20 days we have seen the trend flatten." (Furniture & Related Products)
Is there a textile mill or furniture manuf. that is not bankrupt these days? There is probably something lost in translation from Mandarin or Hindi.
'Textile Mills'...pffft yea sure what do they expect us to believe it's the 1920's again? There are none!
'Furniture manufacturing'....all the North Carolina furniture bigwigs are long gone overseas.
There is still furniture manufacturing in NC, albiet cut in half, mostly casegoods jobs all gone to China, but there are still some actually manufacturing furniture employing about 14,000 people in the furniture belt(Alexander, Burke, Catawba, Caldwell Counties)
There are also a couple of textile mills I am familiar with, but their condition is worse. I visited one(I will not name) that once employed 3000 people, a very large facility. They are still running and employee around 150 people now. When you walk into the building you feel like you are walking back in time. The building is falliung apart from ill repair...leaky roofs machinery breaking down constantly hot as hellin the summer very poor working condititons, I am amazed they are still going sicne they are own by a private equity firm.
So the QE bubble meter will move from $85 billion/month to $130 billion/month?
We all know the Federal Reserve won't stop until the US dollar crashes and burns.
The Federal Reserve and Washington's Zimbabwe economic model.
Must....Have....MOAR....free monies....Must Swim....Or Die.....moar.....
Equites are up on poor manufacturing and retail sales? lol! This has become a comedy act!
its a good thing they got all that military equipment in place for Syria, this pig fucker could go down any second.
Well I guess this absolute farce must at least be keeping the Eccles residents happy or something...I don't know.
The financial media will find some way to pick up this turd by the clean end.
Dr copper knew this already weeks ago.
time for a macro chart update
Die SPY die.
Down you go, you bloated swine.
Thanks for letting me share.
Had you mentioned the word "bullish" I would have up-arrowed you...
How much of GDP is sitting in warehouses, car lots, and store shelves? Who knew the expiration dates on stuff was actually meant for retailers instead of consumers...
People will be buying back all those REIT's and BDC's they sold over the last few weeks in 3, 2, 1...
Let it burn.
RE
Workers counter: "We are having a hard time convincing greedy assholes to pay good wages"
Only real question is who got the pre-print report Friday afternoon and started that selloff...
Still have a long way to go to confirm change in trend in SP500 weekly.
http://bullandbearmash.com/chart/sp500-weekly-1-confirming-bought-case/
Turbo Tuesday may push us back up - PMI's are shite, but macros don't matter as we all know.
How do you like the last 4 years during which our economies supposed were in ‘recovery’ ?
Meanwhile, gold and silver are going up.
We sure are lucky that consumer confidence is at 5 year highs.