Wealth Effect Disappointed As Non-Manufacturing ISM Beats Expectations

Tyler Durden's picture

In the worst possible news for the wealth effect and stocks (recall JPM's warning yesterday), moments ago the Non-manufacturing ISM printed at 55.4, beating expectations of a 54.0 print and above September 54.4 number proving once again that all the fire and brimstone about the government shutdown having an adverse impact on the US economy was nothing but hollow propaganda. As for the actual print, this is horrible news for those betting on ongoing US economic collapse as it means the Fed may, just may, reduce its $85 billion in monthly flow some time in the future. Sure enough, stocks kneejerked lower, as did gold and the EURUSD, while 10 Year yields spiked to 2.664%. And while the bulk of internal numbers also rose, those who live and breathe the destruction of the US economy to send the S&P to recorder highs, can find solace in a New Orders print of 56.8, down from 59.6, which was the lowest number since July.

Charting the data:

Breakdown:

From the report:

The report was issued today by Anthony Nieves, CPSM, C.P.M., CFPM, chair of the Institute for Supply Management™ Non-Manufacturing Business Survey Committee. "The NMI® registered 55.4 percent in October, 1 percentage point higher than September's reading of 54.4 percent. This indicates continued growth at a faster rate in the non-manufacturing sector. The Non-Manufacturing Business Activity Index increased to 59.7 percent, which is 4.6 percentage points higher than the 55.1 percent reported in September, reflecting growth for the 51st consecutive month. The New Orders Index decreased by 2.8 percentage points to 56.8 percent, and the Employment Index increased 3.5 percentage points to 56.2 percent, indicating growth in employment for the 15th consecutive month. The Prices Index decreased 1.1 percentage points to 56.1 percent, indicating prices increased at a slower rate in October when compared to September. According to the NMI®, 10 non-manufacturing industries reported growth in October. Respondents' comments are mixed with the majority reflecting an uptick in business. A number of respondents indicate that they are negatively impacted by the government shutdown."

From the respondents.

  • "Sales continue to increase slightly over the same period last year." (Public Administration)
  • "We experienced an increase in the level of interest in our services, job awards and professional services placements." (Professional, Scientific & Technical Services)
  • "Signs of improvement and stability are encouraging; however, the political environment and the cost of ObamaCare are causing a retrenching as costs escalate and margins shrink." (Retail Trade)
  • "Economy continues to be a challenge with consumer fear as a result of the government partial shutdown." (Accommodation & Food Services)
  • "Economic conditions continue to improve slowly in spite of government policy. Housing continues to lead." (Management of Companies & Support Services)
  • "Business activities are stable compared to previous month." (Finance & Insurance)

But perhaps most amusing about today's report is that in addition to shrimpt, the only commodity reported in short supply, continues to be Helium, now in its fifth month of shortage. Considering Washington, one can see why.