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Non-Manufacturing ISM Comes In Line, Factory Orders Miss: Inventory To Sales Highest Since October 2009
Despite market bull hopes for a collapse in the non-manufacturing ISM (remember: bad news is good news for momentum chasers and the Mandarins of Marriner Eccles) and a repeat of the sub-50 Manufacturing ISM fiasco, moments ago the Institute for Supply Management released the June Non-manufacturing ISM which printed at 53.7, just above expectations of a 53.5 print, and above last month's disappointing 53.1. The New Orders index rose from 54.5 to 56.0 and the Business Activity also rising from 55.0 to 56.5, offset by a drop in inventories from 56.0 to 51.5, a collapse in Imports from 58.5 to 49.5 and, troublingly, an ADP validating decling in the employment index from 52.0 to just above contraction at 50.1. Perhaps the most informative respondent comment was the following: "Healthcare reform and sequestration are having a strong negative impact on business." (Health Care & Social Assistance).
Oh well, a mixed report that is neither overly bullish or bearish, so those hoping for bad news will have to look at the Factory Orders release which posted its second miss in a row, printing at 1.0% on expectations of a 1.5% rise.
From the ISM:
"The NMI™ registered 53.7 percent in May, 0.6 percentage point higher than the 53.1 percent registered in April. This indicates continued growth at a slightly faster rate in the non-manufacturing sector. The Non-Manufacturing Business Activity Index registered 56.5 percent, which is 1.5 percentage points higher than the 55 percent reported in April, reflecting growth for the 46th consecutive month. The New Orders Index increased by 1.5 percentage points to 56 percent, and the Employment Index decreased 1.9 percentage points to 50.1 percent, indicating growth in employment for the 10th consecutive month. The Prices Index decreased 0.1 percentage point to 51.1 percent, indicating prices increased at a slower rate in May when compared to April. According to the NMI™, 13 non-manufacturing industries reported growth in May. The majority of respondents' comments are optimistic about business conditions. However, there is a degree of uncertainty about the long-term outlook."
The full ISM data breakdown:
Looking at the employment index alone:
And the always entertaining survey respondents:
- "The flat sequential sales — which began in January 2012 — are
still continuing. At this point, we do not predict any lift in the
foreseeable future. We do not see any negatives; it appears that
business has reached its 'cruising altitude' and is staying there." (Wholesale Trade) - "Sales remain slightly higher than the same period last year, but still below pre-recession sales figures." (Public Administration)
- "The job order market slowed in April/May. We saw a slight increase in employment due to working down the order/inquiry backlog." (Professional, Scientific & Technical Services)
- "Business seems to be improving through the second half of the year." (Information)
- "Fairly stable the last month; overall optimistic going forward." (Accommodation & Food Services)
- "Healthcare reform and sequestration are having a strong negative impact on business." (Health Care & Social Assistance)
- "North America continues to improve at a modest rate. Europe is still a problem for global recovery." (Mining)
And while Factory Orders missed expectations, that miss was made worse by the fact that what was built was not sold (yet) as inventory-to-sales ratio hit a post-recession high. if we build it they will buy once again is the matra of US manufacturing...
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I have a very weird feeling that right about now every muppet is deciding it may be a good idea to lock in those gains. I wonder who they are going to sell to?
Benny has a very big purse.
That's our purse dammit.
Bwahahahahahah that's a good one. They can have the debt purse, I'll take the golden goose.
That goose isn't here anymore. It's safe in China: http://1.bp.blogspot.com/_5sMCzwASoc0/TH3TsrfT9QI/AAAAAAAAAD4/ZV7oB0qFuzA/s1600/chinesebbq_stall.jpg
China banned rubber ducks, the golden geese must be next.
The purse has a hole in the bottom...
"That's our purse dammit."
Not anymore it aint.
License plate at G8: "PUMPITUP"
Bubble Bernanke and his member banksters will be sucking up all the equity sells.
Although they would have no control in an all out dump in the US dollar. A currency crisis would be the Fed's worse nightmare as they would loose control very quickly.
It's where more printing kills you.
Looks like they're rolling it all in to Scamazon though ... don't you know they're adding Dora and groceries to their long list of zero margin wares.
In general, high beta shit has yet to give up the ghost, but if this market nervousness lasts much longer, it will get ugly fast.
Whatever these choomsters, who make up such numbers, smoke - I'm willing to pay a lot of money for it!
Look at crude just stay there. Wow. where's that deflation?
the war bid is in place
Okay, I did have a look, and it was not so inspirational. The deflation seems to be somewhere else. If I find it, I'll let you know ... ;-)
Gas just hit $4.25 here. That's up .75c in two weeks. But food and energy don't count right?
$4.25?
holy shit.
I know it's freaking nuts. rbob is at 2.84 and we are at $4.25. I've never seen the spread that wide.
what is paper oil going for?
Baffle 'em with bullshit.
"They wouldn't let ya in here if you weren't a chump."
...Paul Newman as Henry Gondorf in "The Sting"
I think that somebody didn't get the memo. Good numbers are only supposed to be published around election time.
...aaand here's Marketwatch's version. It's almost as if the mainstr^H^H^H^H^H^H^H corporate media doesn't want to acknowledge bad news.
Another Wonderful "SUMMER OF RECOVERY" underway in the Economy. How long before they trot out Paul Krugman to put lipstick on the various wild hogs running loose in the Economy right now.
Dr. Krugman is too busy trying to morse code with the aliens that are coming to help. Beep, beep, boop...come in Alpha Centauri - you're our only hope.
Actually Dr. Krugman did contact the aliens but they only took gold and silver as payment.
I'm sure Health Care will work best when everyone is already dead from starvation and poverty.
"The flat sequential sales — which began in January 2012 — are still continuing. At this point, we do not predict any lift in the foreseeable future. We do not see any negatives; it appears that business has reached its 'cruising altitude' and is staying there."
This is the new normal but remember QE3 is also part of the new normal. Take away QE and what happens?
Also, MSM is now chanting that "stable" data, i.e. flat data, should be bullish.
So according to the MSM:
Improving Data = Bullish
Declining Data = Bullish
Flat Data = Bullish
Stuff those channels.
Add MO POMO.
Problems solved.
We don't need no stinkin' customers.
No one is buying GMO. That crap is going to rot on the shelves.
"Healthcare reform and sequestration are having a strong negative impact on business."
56 trillion in debt outstanding is having a strong negative impact on business.
Sequestration is not the problem. 17 trillion in government debt is the problem. If the horse pulls the cart over the cliff, it is not the carts fault. If there was no debt problem there would be no sequestration.
No worries - Benny says that they taper the taper if things don't go well.
This economy is like a chicken with its head cut off. It's still running around the room with blood squirting out of its stump. It's just a matter of time until this chicken (economy) realizes its dead.
Awesome analogy.
Bernookie is grinning. He is taking some froth out of stocks just by jawboning.
He's getting exactly what he wants by BS-ing about a taper that won't happen.
So, he's buying more time without actually paying for it, just what he wants.
I don't believe any of that whatsoever at all.
This has been another one of my topics of interest, the imbalance of tangibles and intangibles and the value. We are seeing the loss of R and D and the opportunites to create some really need products and services in the US with too many wanting to flip a buck on an algorithm. We still import way too much and yes automation is replacing some jobs but that is happening everywhere but why not keep the talent in the US and train people on the new jobs that control the automation, etc. We don't do that.
Rather we suck up and sell more data and suck that dollar out of selling data. It's easy for banks and companies as we don't have enoug or any modeling and algorithm sleuths working for the government and they are completely bliss to this as well as Congress. You can't get any privacy laws to work without identifiyng who's selling the data, liicense them and excise tax the billions in profits. After the money is made and your data is all messed up with errors you get to fix it on your own dime, while all the banks and coproations already made their billions selling your data and your data profile.
Enter SAP who now wants to broker data to the wireless carriers wthi their algorithms whereby they cna work the data and make it even more valuable, etc. Read my post as the selling of data is not a one stop shop, as the data base gets queried with other data and you have new analytics appar and so on.
http://ducknetweb.blogspot.com/2013/06/so-much-money-and-profit-in-data....
Health insurers are having a hay day buying and selling data as well..here's a couple examples on what they are doing buying your Visa and MasterCard purchasing data and Blue Cross said it was looking for members getting fat buying larger clothes. Good try but bad explanation as now that they have this data, what else will the combine it wiht and sell?
http://ducknetweb.blogspot.com/2013/03/insurance-companies-are-buying-up...
They want to see how much junk food you buy too...this is a ton of the expense in healthcare reform..a lot of what they are doing is profit generated and doesn't create better care. See what I mean by "flipping an algorithm" for profit versus investing ind job creating manufacturing with some of this? It's way out of balance and we need both tangibles and intangibles and I started this conversation a ocuple years ago and the imbalance keeps getting worse as long as banks and corporations can mine data and flip algos for money and then market you to ensure you beleive they really have this huge value. Some have value and some don't.
http://ducknetweb.blogspot.com/2013/05/health-insurers-and-others-trying...
great analysis as always!!!