Chicago PMI 56.5 Lowest Since November 2009, But Beats Expectations

Tyler Durden's picture

That the August Chicago PMI dropped to 56.6, down from 58.8 in Julye, and the lowest since November 2009 is irrelevant. What is relevant is that this number beat expectations of 53.3, so the ripfest is on: after all, stocks move higher on worse than expected data, which should they not surge on a consensus beat. Remember: the QE3/career risk rally is on. Nothing else matters. Among the index components, Prices paid dropped from 71.7 to 68.6, Production declined from 64.3 to 57.8, same for New Orders, Backlogs, and Inventtories. The two components that did go up were Supplied Deliveries from 55.9 to 60.5 and Employment, up from 51.5 to 52.1. And now everyone looks to tomorrow's ISM, for which the PMI is traditionally a good proxy, with hope that the number will print above 50 despite every single regional Fed indicating a mid-40's print.

Knee jark market response:


"This is a good number, but yesterday consumer confidence was the worst in two years. I don't see any improvement. You have to take the good with the bad, but I remain in the double dip camp, I think GDP is horrendous. I don't think our growth rate isn't going to get us anywhere. The only difference lately is that the market takes bad news pretty well, which is a short-term bullish sign."

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PulauHantu29's picture

"Better then expected." What else?

espirit's picture

"What else"?  Decouple the dollah from all else and send the markets to the moon.

Pulling the wool over the sheeples eyes once again.

hedgeless_horseman's picture
, On Wednesday August 31, 2011, 10:38 am EDT


NEW YORK (AP) -- Stocks rose Wednesday, capping a wild month in the stock market, after a surge in factory orders reassured investors that the manufacturing industry remains healthy.


Factory orders rose 2.4 percent in July, the biggest increase since March. Demand for automobiles jumped by the largest amount in eight years and orders for commercial airplanes soared. Manufacturing has been one of the strongest parts of the economy since the recession ended about two years ago.


The Dow Jones industrial average rose 143 points, or 1.2 percent, to 11,703. The Dow turned positive for the year, and has risen seven of the last eight days. Aluminum maker Alcoa Inc. rose 4.3 percent, the most of the 30 companies that make up the Dow average.

Translational Lift's picture

Game on!!!  BTFD.....F-N joke........

Sudden Debt's picture

Expect nothing and you'll always have better results.


TruthInSunshine's picture

For those who pine for QE3, they will have to make do with mere 'twists' in the breeze:

AUGUST 31, 2011

Economy Deeply Divides Fed

Jon Hilsenrath

New Records Show Central Bank Officials at Odds Over How to Revive Recovery

Rejiggering the composition of the Fed's securities holdings could also be a half-step which wins common agreement. Economic theory suggests that the Fed can push down long-term interest rates and stimulate growth by buying more long-term securities while it sells short-term securities. The Fed could twist the portfolio in this manner without adding to it, which might pacify inflation hawks who worry that the Fed's $2.8 trillion portfolio of securities, loans and other assets already is too large.

Write to Jon Hilsenrath at

papaswamp's picture

Head and shoulders bitchez

101 years and counting's picture

looks more like a cock and balls formation.

slaughterer's picture

Sitting currently in 1227-1230 resistance region, which we calculate will be the end-point of this bear market rally.  We sold off three quarters of our ES/SPY calls and are just watching and waiting for a signal to re-short. 

The 50DMA is located at the neckline of the H&S: 1257.72.  The people who really have their career based on this crazy rally want to re-test that number and get ES positive for the year again.    

Racer's picture

It isn't a 'market'

HelluvaEngineer's picture

Something appears to be up.  Momo rolling over and some of my bearish call options are being bid up.

Cdad's picture

Stands to reason.  This is one of the most obvious and laughable markups I have ever seen.  The algos that forget to turn off HAVE TO BE arbitraged by the close of this session.  I cannot imagine anyone would actually try to hold this into ISM.

HelluvaEngineer's picture

Looks like a prop job for the end of the month.  I sincerely hope these overpriced equities are currently being distributed to a multitude of Cramericans.

Cdad's picture

By Cramericans, if you mean the people in the control room who call in as supposedly  "active investors," I don't think they can own individual stocks.  

These stocks are being distributed to ETF managers.  You can see the accumulation on the inverse ETFs even now, although the pricing on these things is entirely disconnected from good luck with those.

Death of Market credibility, one markup at a time.


Cdad's picture

Check that high print on the Roach Motel [SPY].  Electronic manipulation at its finest.  Someone is going to get a big bonus this Christmas when that short, set at 127.07 is cashed in after the next leg down.

But maybe...and we can always hope...Mary Schapiro of the SEC will finally quit meeting with the criminal syndicate masterminds of Wall Street to discuss how important those co located computers in the room next to where Duncan Niederauer takes his afternoon constitutional are.  I dare say that free market capitalism now depends on such computer theft as this.

Good luck out the market has now received its most basic signal that tomorrow's ISM will be really bad...and "surprisingly" so.


**Tyler, could you ask the boys over at Nanex about this one...just for shits and giggles?**

I am Jobe's picture

Nothing to see here. Another scam

gunsmoke011's picture

I just LOVE living in this Goldilocks World of "Better Than Expectations"! Reminds me of the sotry of Goldilocks - when she was scampering down the trail and was attacked by the bear. during the attack, the bear ate both of her legs off, ate both of her arms off, she had her guts ripped out and will be wearing a colostomy bag for the rest of her life, the bear ripped half of her face off so she will now have to be fed through a tracheometry tube the rest of her life - and obviously she is eaten up with bed sores since she will never be able to move agian - which is of no soncsquence since she will be in a coma until the day she dies -- BUT -- It was Better than the Expert Analyst Expected -- They thought The bear would have killed her!

Caviar Emptor's picture

ISM New York report out today: Officially in contraction mode to 47.8 (below 50) , now at levels last seen June, 2009. Revenues were down 40% from August 2010! And businesses report difficulty with financing

reading's picture

I thought better than expected was bad now as that would mean no QE3.  We need bad, really bad then we can rally 100 points a day on the S&P.

Boilermaker's picture

Yea, it's all so polluted now that it's literally worthless.  If you aren't on the inside and know which way the market will be shoved then you shouldn't be in it, period.

It's just three card monte now.  If you aren't moving the walnut shells, you on the wrong side of the bet.

EscapeKey's picture

Nah, this is a replay of the time leading up to QE2;

Good news = rally, as the "economy is vibrant and healthy"

Bad news = rally, as "likelyhood of QE3 will emerge sooner"

Horrible news = rally, as "more QE will solve all problems"

DefiantSurf's picture

I need to just go back to surfing for porn, reading dribble like this just upsets me, porn makes me happy


MFL8240's picture

ADP down, PMI at 2009 levels, spells a good gay for stocks.  If they were both higher, it would be a better day for the Wall Street circus.  Gold down they call it yesterdays news. What a fucking joke this whole sytem is.

Caviar Emptor's picture

US Mortgage Aps down 10% last week (!)

MFL8240's picture

More good news, another 50 Dow points.

Caviar Emptor's picture

The Wall Streeters still think big QE is coming (cause it goes straight into their pockets). They're gonna be surprised. 

Cdad's picture

I don't think the criminal syndicate Wall Streeters think QE is coming.  They are just saying this and posturing, while selling into their own markup...selling to the criminal syndicate Wall Streeters who previously refused to buy stocks because they know the fundamentals are absolutely deteriorating...but are now buying things so they can show them on their books at month end.

And those are the guys, ironically, who will be punished as the markup is reversed.

Wall Street...always rewarding the shysters and while shafting actual work and productivity.  Pink slips, please.  We need more Wall Street pink slips if we are ever going to recover.

sun tzu's picture

Homebuilders are rallying on the good news

Archimedes's picture

Well aren't the auto companies included in the Chicago PMI? I mean they have been building cars straight through the summer. I wonder how many cars are on the dealer lots right now.

But it is still a beat. I find all of this very entertaining as I continue to build stock piles of money on the side and make quick in and out trades for a few grand here and there...

Mike2756's picture

Judging by one of the local dealers, quite a bit.

Version 7's picture

I hope the markets take every chance they can to rally right now so there can be a decent crash in Sept/Oct

LongBallsShortBrains's picture

Sell the fuckin' rip. !!!

Caviar Emptor's picture

OECD Second quarter report out today:


The growth in goods trade between major economies slumped in the second quarter of 2011, the Organization for Economic Cooperation and Development said Wednesday, in the latest sign that the global economy may be losing steam.

The Paris-based think tank said import growth in the Group of Seven leading nations and the key emerging markets of Brazil, Russia, India, China and South Africa expanded just 1.1% in the second quarter--down from 10.1% in the first. Total export growth slowed to 1.9% from 7.7%, the OECD said.

(From Dow Jones News Service)

EscapeKey's picture

No worries, hedonics and imputations to the rescue! Positive GDP growth is guaranteed.

Boilermaker's picture

So, someone help me out, if damn near everything beats expectations...aren't they just shitty expectations?

Caviar Emptor's picture

It's what you call lowering the bar for the fat kid in the 3rd grade gym class

Havana White's picture

Can go all the way to barely above zero with "better than expected."

High Plains Drifter's picture

ladies and gentlemen,  we are now entering the hobbs bottom.....

John Law Lives's picture

The S&P 500 has now moved up approximately 91 points off its intraday low of ~1136 on Friday, August 26 when the Fed didn't announce QE3.

What a FUBAR market.  All that is needed for a rally is for The Great Chairsatan to dangle a carrot...

maxmad's picture

Not long now before it will be cheaper to wipe myself with dollars bills, than wasting valuable toilet paper!

RobotTrader's picture



CRB Index just broke out to 3 - mo. highs.

As long as the CRB, AUD, EUR are outperforming, bears are going to be in for much more pain.

Like I said, I bet we run all the way up to the 200-day.  By then every bear who shorted late will be way underwater.


fuu's picture

And slaughterer's 1227 call looks in the bag.

Irish66's picture

touched and pulled off, interesting