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.

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Dan The Man's picture

Havent read it yet

 

Nothing but the truth.'s picture

Another day, another set of fudged data.

fonzannoon's picture

10yr heading towards 2.75% Need a weak NFP to keep things in check. Otherwise it's back to 2.95%

LetThemEatRand's picture

"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)"

These guys all watch too much Fox News.   Seriously, the economy continues to be a challenge with consumer fear as a result of the government partial shutdown?!   Because of Obamacare that has barely started yet?   Housing continues to lead?! What a crock.  Every one of these answers is bullshit.  The economy is weak because we have the lowest percentage of eligible people working in generations, and worker wages have been going DOWN thanks to inflation for a generation.  The rest makes it even worse, but the root of the problem is our middle class is going away.   But we can't talk about that.  It's all the government shutdown and the weather.

RSloane's picture

Yah, best to watch MSNBC where no one has even heard of numbers.

RSloane's picture

Or we can watch CNN where we are taught numbers are our enemy.

LetThemEatRand's picture

My point is its best to watch none of them.  It's all Red/Blue propaganda.

RSloane's picture

See my post below. If you want to find out absolutely anything about our economy or any of its facets one has to go outside the US MSM. Its all propaganda, its all bullshit.

GrinandBearit's picture

How can anyone believe ANY of these ridiculous reports/numbers?

Cdad's picture

They don't.  The best description of today's price action is...ENTIRELY ILLIQUID.

Sure...you will have some quant guys taking shots and pushing things around...but that is far different than describing this as some sort of continuation of a raging bull market.

In fact...it's a joke...and those same quant guys are doing their thing while listening very carefully for the sound of silence...indicating that the music has stopped.

Thank you, Ben Bernanke, for helping to destroy the world's most important capital markets via your perpetual bad bank bailout efforts.  We appreciate the economic wasteland.

FieldingMellish's picture

Time to massage the numbers downwards...

Running On Bingo Fuel's picture

King dollar rising from the ashes. Crude being crude but still no reciprocating relief at the pumps. We'll need that to ignite the next leg of the equity rally. Gold resumes it's year long downtrend.

Over.

B2u's picture

Someone didn't read the memo from the White House...

MFLTucson's picture

Sure, I believe this.

q99x2's picture

FRAUD once again suprises to the upside. Bundles are being made as companies continue to go out of business.

Dr. Engali's picture

Government shut down? What a load of crap. Considering the fact that some baffoons still reference the sequester, I wonder how long we will have to hear about the government shut down that never happened.

RSloane's picture

Was there a government shutdown Doc? I blinked and must have missed it.

SheepDog-One's picture

And anyone actually takes these number spews as anything but staged propaganda now?

RSloane's picture

 I think we can safely say that anything even remotely related to counting can be discounted as a propaganda piece. You literally have to go outside the US MSM to find out the true story.

Lordflin's picture

Hmmm... Guess 2000 years of monetary history... going only so far back as the peak of Rome... are a fluke then. And the commensurate moral decadence must simply be a coincidence.

Thank God we can keep this party going forever... and here I was becoming needlessly concerned.

ejmoosa's picture

"Debt: The First 5,000 Years" is worth a read.