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Manufacturing ISM Beats As Expected, Employment Index Drops To Lowest Since September 2009
No surprise in today's most important economic report: just as we predicted first thing this morning, "In keeping with the tradition of Baffle with BS, we expect the ISM to come in well above expectations to offset the major Chicago PMI disappointment." Just as expected, the headline June ISM just printed at 50.9, a beat of expectations of 50.5, and up from May's 49. And just to make sure everyone is completely baffled with unbelievable BS, while the New Orders number rose from 48.8 to 51.9, and Production (+4.8), Prices (+3), Inventories (+1.5), and Deliveries (+1.3), all rose, it was the time of Employment Index to drop from 50.1 to 48.7: the first sub-50 print since September 2009. In other words, just as every week/strong economic report is offset by a matchin strong/weak economic report a few days later, expect this Friday's NFP to come in blistering and to deny the ISM weak jobs number especially since Goldman is now warning of a "disappointment" to consensus (and with that put the Taper tantrum back front and center).
From the ISM's Holcombe: "The PMI™ registered 50.9 percent, an increase of 1.9 percentage points from May's reading of 49 percent, indicating expansion in the manufacturing sector for the fifth time in the first six months of 2013. The New Orders Index increased in June by 3.1 percentage points to 51.9 percent, and the Production Index increased by 4.8 percentage points to 53.4 percent. The Employment Index registered 48.7 percent, a decrease of 1.4 percentage points compared to May's reading of 50.1 percent. Manufacturing employment contracted for the first time since September 2009, when the index registered 47.8 percent. The Prices Index registered 52.5 percent, increasing 3 percentage points from May, indicating that overall raw materials prices increased from last month. Comments from the panel generally indicate slow growth and improving business conditions."
The breakdown:
Visually, the headline print:
And just the employment index:
From the respondents:
- "Business remains good to improving." (Miscellaneous Manufacturing)
- "Industry volumes picking up with improved housing starts." (Electrical Equipment, Appliances & Components)
- "Indications are that customers have acceptable inventory levels, and as a result, are backing down on new orders and reassessing market conditions." (Wood Products)
- "Last couple of weeks a little slower." (Furniture & Related Products)
- "Seeing signs of life through summer retail [sales] promotions — still an overall soft market." (Food, Beverage & Tobacco Products)
- "Business is steady. Qualified CNC machinists are hard to find." (Fabricated Metal Products)
- "Weather conditions are causing uncertainty in agricultural markets." (Machinery)
- "Continued slow improvements." (Transportation Equipment)
- "June sales appear to have rebounded from what was a lackluster May." (Paper Products)
- "Slow growth continues to choke the recovery. We are not out of the woods yet by any stretch of the imagination." (Chemical Products)
And the breakdown of commodities up and down in price:
Commodities Up in Price
- Aluminum Products; Caustic Soda (3); Corrugated Boxes (11); Corrugated Packaging (2); Lumber (6); Plastic Products; Plywood; and Polypropylene*.
Commodities Down in Price
- Butter; Hydraulic Components; Polypropylene (2)*; Stainless Steel (2); Steel (3); Steel — Cold Rolled; Steel — Hot Rolled (2); and Sugar (2).
As a result, algos are buying stocks head over fist, because algos are buying stocks head over fist.
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Moar from less
I wonder when they start putting nets around mfg facilities in America???
Of course. The US needs to paint a pretty picture and keep the lobotomized slaves half way contained while they are to kill millions around the globe in the global gobble conquest.
If we would just listen to Krugman and start preparing for alient attack we could get that number even higher...http://tinyurl.com/pp588mj
Rates up, commods up, hours worked down.
LOL!!
Must have been some weather helping.
http://www.youtube.com/watch?v=HG7dmCjz534
I expect everything to be better than I expect. Except for those things I expect to be the same as I expect, or worse than I expect.
here is how the bernanke led fed ponzi scheme markets work. its very simple.
1. markets will be green every single day no matter what economic data ia worldwide and in the u.s. must keep it green.
2. if by a accident, markets finish red, say triple digit red, futures overnight and next morning must be high enough to wipe away the previous days losses at the open.
3. bottom line? markets can not go down.
who cares about employment, who cares about the 2nd largest economy continuing to contract, who cares about europe slowing more and more, 50.9 ism number has me throwing a party things are so well, and dow at 15075 now is making me feel that everything is great.
also, must get dow, nasdaq, and s&p as green as possible going into july 4th.
you not just now realizing this, are you?
:-)
no , trust me ive realized it for years.
just venting at this total fucking bullshit.
if bernanke and his fed friends are allowed to continue to do this without any accountability, why the fuck should a guy like madoff still be in jail?
You forgot:
Gold is to be seen as an illegitimate investment option that will be constantly manipulated and smacked down.
"expect this Friday's NFP to come in blistering and to deny the ISM weak jobs number especially since Goldman is now warning of a "disappointment" to consensus (and with that put the Taper tantrum back front and center"
I think this is very accurate. I guess we will see.
A dueling 'good propaganda/bad propaganda' war is now all that supports the entire worlds financial system.....well good luck with all that!
Everything is bullish. Just BTFD and don't ask questions.
bullish
Off topic:
It always makes me a bit nervous when I start seeing sidebar ads for GE-Capital Bank CDs.
I guess if you're a 'bank' that's what you do, but I swear the last time I saw those was in 2009 when GE was trading at like $9 and their capital needs were intense, and they were pulling credit lines left and right.
Sort of like major dealers expousing 72 hour only PM sales just before the bottom falls out.
Or high capacity magazines 50% off...
Makes me very nervous.
ISM up across the board except employment - well now that makes sense.
Got my July POMO report - $3.5B spend today. Wed is a $5.75B spend. friday has no POMO.
e (euler) to the exponent cntrl-P
Humans? Meh....who needs em anymore? We got MACHINES now for everything including running the entire world financial system! Fuckin humans and their puny 'labor'....and just wait till SkyNet becomes FULLY aware!!
Bring back Max HeadRoom...
I always liked that guy, er whatever it was.
'Major Chicago PMI disappointment' wait didn't markets fly triple digits higher that day?
look at Japan rallying again while their bond market is silent. China's massive liquidity crunch has taken a vacation. U.S 3rd quarter is picking up right where it left off. Crude oil rising to celebrate the increasing purchasing power of the consumer.
We are either at the precipice of peak complacency being met by something massive, or just sitting in a raft in the middle of the ocean of liquidity while sun and dehydration slowly makes us go insane.
It certainly seems like the latter to me.
They need the vacationing US consumer to consume like it is the summah of 2007.
Yep, when I was a computer tech in the USN running a suite of AN/UYK-44 computers we used to just slide a program punch card thru a reader and they went on to pretty much run the entire weapons system all day, and this was in the 90's.....same stuff as the world economy today all just on a computer program.
Batshit crazy — I has it.
</Russian accent>
what they are saying is max out thoes credit cards and buy,buy,buy! all is well in the land of make believe.
The only thing holding up stocks and bonds right now is that the parties holding them have sold derivatives betting they will stay up.
On the other side of these derivative trades would be big non bank corporations, thus no capex and "corporations flush with money" from borrowing. These corporations have hedged with big banks as counterparties.
Big banks and corporations would be on the opposite sides of the trades
The Fed tested tapering which resulted on banks obligated to pay rather than get paid, thus obligated to sell.
Hence, tapering halted right now and banks are obligated to hold the market up.
I've said it many times, that because of derivatives, market cannot possible go down, it can only implode.
Implosion is coming because the economy has cratered for the following reasons:
1) Crude oil
2) Dollar avoidance due to zirp which had led to currency swaps
Give it some more days.
'Derivatives'! Wow and I thought they all swore up and down they 'learned their lesson this time, and will never let that happen again' in 2008....yea sure they did.
This is the hidden war inside government as far as economy is concerned:
Industry vs the Big Banks
The only way to avoid implosion in this hyperleveraged, shadowy derivative, cross linked market would be for the money being added to not be leveraged and be used to pay down the hyper leverage.
Ain't ever going to happen because the banksters are gamblers at heart and take the money being added, double down with it on the expectation that they can win big and pay it all back. see Jon Corzine.
The implosion will be self inflicted. There are many intrests in this boat. If one sells out, they die. If one stops printing, they die. They won't sell nor stop printing. They will, however, squabble. Arb the squabbles
Then the corporations will keep paying massive hedging money to the big banks hence economy will contract a lot more and the world will keep shunning the dollar
I don't think big corporations big oil military industrial complex are dead beats
Few more days I think just few more days
LOOK KIDS!!! A RECOVERY!!! .... AND GET OFF THE FUCKING GREEN GRASS OR YOU'LL BLOW IT FOR EVERYBODY!!
off topic, but has anyone else seen the latest pricing reported by yahoo finance on GDXJ?
closed at about $9.00 on Friday, and it now shows it at about $37.00- about a 303% gain this am?
A four for one reverse split.
Thanks, Doc!
gotta.run.the.market.higher.
Right gotta get back higher, because we were there already and had to 'correct' lower...but now that's not correct we need to be higher again.....makes perfect sense!!
bernanke is prob speaking to china right now to tell them if they want to expose any major problems about the banks, do it wed night so the u.s markets wont be red on thursday due to the holiday.
then of course thursday night before the u.s market opens on friday again, announce how everything is doing fine and no worries so the dow futures can be up 300 pts going into the jobs report, and then when the jobs report is announced, it will either be a beat, which can elevate futures to 500 pts and they can say the fed is doing a great job, but if its a miss, the dow can go to 700 plus because we need more qe.
perfect scenario for these criminals.
so bottom line europe or asia, if u have any terrible news to expose, do it wednesday night so the u.s markets cant drop, but make sure to deny those rumors by thursday night friday morning so the u.s markets can hit new highs.
Also, why does Fridays data 'need to do anything' at all to 'offset' this? Fuckin equities up 1.5% across the board.
Last one out, shut the lights off, if you've still got an arm left.
how much does manufacturing contribute to the economy, 13% ? BFD. Love the part about the inability to find qualified CNC machinists, we can't train people anymore? I guess when " Rosie the riveter" fabricated all the planes and tanks she already had those skills.
You mean part loader, chip shoveler, or coolant changer?
Seems to me, you have to pay for experience - not prevalent in todays manufacturing environment.
when you live in a "dream country" anything is possible untill you wake up of course!
Nothing strange with the employment part down and all else up...ROBOTS...