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September Manufacturing ISM Beats Expectations, Rises Modestly

Tyler Durden's picture





 

Just like Friday's Chicago PMI, the Manufacturing ISM has now completely decoupled from not only the developing world, but from the rest of America, as somehow US manufacturing in September came in better than expected, printing at 51.6, on expectations of a modest decline from 50.6 in August to 50.5. Commentary from the ISM's Bradley Holcomb: "The PMI registered 51.6 percent, an increase of 1 percentage point from August, indicating expansion in the manufacturing sector for the 26th consecutive month, at a slightly higher rate. The Production Index registered 51.2 percent, indicating a return to growth after contracting in August for the first time since May of 2009. The New Orders Index remained unchanged from August at 49.6 percent, indicating contraction for the third consecutive month. The Backlog of Orders Index decreased 4.5 percentage points to 41.5 percent, contracting for the fourth consecutive month and reaching its lowest level since April 2009, when it registered 40.5 percent. Comments from respondents generally reflect concern over the sluggish economy, political and policy uncertainty in Washington, and forecasts of ongoing high unemployment that will continue to put pressure on demand for manufactured products." And reading within the index, the data was not all good, with the all important New Orders unchanged, while an increase in Price Paid showed a modest increase in inflation, and hence deterioration in margins. Compounding the picture, Backlog of orders slumped, while Customer inventories increased. Altogether a non-impressive number, although at least it did not post the first contraction in 26 months, as Goldman had expected.

September PMI. This is supposed to be good news?

New Orders vs GDP:

PMI Constituents:

From the survey respondents:

  • "The economy continues to be a drag on our business outlook. We are trying to deal with new and additional FDA regulations which are costing significant dollars. It is hard to recoup any of these additional costs in our pricing levels without losing significant sales volumes." (Chemical Products)
  • "Market is cautious, but still steady." (Electrical Equipment, Appliances & Components)
  • "Global demand for semiconductors is down and maybe not yet 'bottomed out.' Inventory reduction activities are a priority." (Computer & Electronic Products)
  • "Still strong automotive demand." (Fabricated Metal Products)
  • "Orders remain consistent and steady — no sign of lower demand." (Paper Products)
  • "Japan supply chain issues are over, but exchange rates and raw material prices are hurting our profit." (Transportation Equipment)
  • "We sense a weakening in demand, but it is not extreme at this point." (Plastics & Rubber Products)
  • "Overall, business is improving with a measurable uptick in orders this month. Part of that is due to pre-holiday season orders." (Miscellaneous Manufacturing)
  • "Business continues to be sluggish." (Furniture & Related Products)

And knee jerk reaction from Wall Street, via Reuters:

PIERRE ELLIS, SENIOR ECONOMIST, DECISION ECONOMICS, NEW YORK:

"The ISM manufacturing index was a little better than expected, but not greatly reassuring, mainly because new orders are stagnant, in contrast to the very good news evident in the Chicago purchasing managers survey. But the nationwide ISM survey did have the redeeming feature that employment strengthened, which could mean companies are looking beyond the immediate weakness. Export orders were encouragingly strong."

 


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Mon, 10/03/2011 - 10:14 | Link to Comment razorthin
razorthin's picture

Kick!

Mon, 10/03/2011 - 10:16 | Link to Comment Ivanovich
Ivanovich's picture

Apparently the robots like it.  I was watching ES and went "wtf!"

Mon, 10/03/2011 - 10:19 | Link to Comment bankerboy
bankerboy's picture

wow...that's incrdible...you were watching ES...what an idiot

 

Mon, 10/03/2011 - 10:37 | Link to Comment Ivanovich
Ivanovich's picture

You forgot to add "I am" to the end of your statement. 

Mon, 10/03/2011 - 10:25 | Link to Comment buzzsaw99
buzzsaw99's picture

dude, the game is live on the big board. lulz

Mon, 10/03/2011 - 11:09 | Link to Comment Don Birnam
Don Birnam's picture

ISM beat: As was the case last week, Dr. Copper is, once again, unconvinced.

Cu down ~2%, to $3.08, as of this writing ( after having briefly dipped to $2.98 earlier in the session ).

Mon, 10/03/2011 - 10:16 | Link to Comment GeneMarchbanks
GeneMarchbanks's picture

Good excuse for the green to appear on my screen.

Mon, 10/03/2011 - 10:17 | Link to Comment TradingJoe
TradingJoe's picture

And we are green, but for how long?!?! :)))

Mon, 10/03/2011 - 10:17 | Link to Comment Cassandra Syndrome
Cassandra Syndrome's picture

Should be good for a 500 Point rally. If you are 1 of the 10 manufacturers left you would be happy as you have it nearly all to yourself now.

Mon, 10/03/2011 - 10:17 | Link to Comment traditionalfunds
traditionalfunds's picture

This won't keep Paulson's customers from redeeming. Et al.

Mon, 10/03/2011 - 10:17 | Link to Comment junkyardjack
junkyardjack's picture

I think that lasted about 5 minutes.  Next rumor please

Mon, 10/03/2011 - 10:27 | Link to Comment Cassandra Syndrome
Cassandra Syndrome's picture

$500 Trillion Bailout coming from Nibiru in 2012

Mon, 10/03/2011 - 10:19 | Link to Comment Screwball
Screwball's picture

Good for about 16 pnts on the S&P and we are now green?  Wow!

I would have swore when I looked at the futures around 6:15 the S&P as down about 12.  So we got back almost 30 pnits since 6:15?  Or did I miss something?

Mon, 10/03/2011 - 10:21 | Link to Comment Caviar Emptor
Caviar Emptor's picture

We're saved! The world was hanging by a thread this morning, but our ISM muscle pulled us out!

Only one leetle detail: nobody to buy the stuff since we all either don't have jobs or might not have one soon. 

Oh and Prices "increasing at a faster pace" in the report? Not to worry! Ben's gonna pck up the tab ....what a groovy Fed Chairman!

Mon, 10/03/2011 - 10:21 | Link to Comment The Swedish Chef
The Swedish Chef's picture

My shorts raped on those numbers... Sometimes I think that investors generally are retarded. Let´s see how many points get shaven off by tomorrows opening bell.

Mon, 10/03/2011 - 10:22 | Link to Comment marcusfenix
marcusfenix's picture

kinda,sorta, but not really good news.

time to get on the holiday bump train to nowhere, just like last year.

it's the Santa Claus stimulus...

 

Mon, 10/03/2011 - 10:23 | Link to Comment Cone of Uncertainty
Cone of Uncertainty's picture

Fade the fuck out of this.

Mon, 10/03/2011 - 10:41 | Link to Comment slaughterer
slaughterer's picture

Fade and get fucked.  

Mon, 10/03/2011 - 10:53 | Link to Comment d00daa
d00daa's picture

wow, great call.

your bull bias is going to lose you a lot of money.  it probably already has.

Mon, 10/03/2011 - 11:12 | Link to Comment Cone of Uncertainty
Cone of Uncertainty's picture

I'm going to Fade, your Fade, and you got fucked twice.

Mon, 10/03/2011 - 10:27 | Link to Comment lunaticfringe
lunaticfringe's picture

When do we get the next piece of manipulated and revised data?

Mon, 10/03/2011 - 10:27 | Link to Comment jdelano
jdelano's picture

Production and employment expanding while demand is contracting.  That settles it.  The core of this country's problems has to be the deterioration of our education system.  We've reached a higher realm of stupid.      

Mon, 10/03/2011 - 10:44 | Link to Comment Caviar Emptor
Caviar Emptor's picture

Ah you noticed? That's what I call magic! Our economy was so great in the past that we've accumulated a large amount of 'Magic capital'.....Poof!

Mon, 10/03/2011 - 10:43 | Link to Comment LookingWithAmazement
LookingWithAmazement's picture

Bye bye crisis, collapse, Armageddon. Told you so. Forget about Black October, growth is coming back. Merry Christmas. Boring world we live in.

Mon, 10/03/2011 - 11:03 | Link to Comment d00daa
d00daa's picture

market calls bullshit, fades ism in 15 min.

psssst, don't tell anyone:  the market is in the process of pricing in an unavoidable, deep recession, even though we haven't "formally" slipped into it yet.  we're just beginning the second leg down, we still have to wait for the beginning of the third leg for all of the numbers to completely collapse (500k+ initial claims prints, sub 40 ism, negative gdp, etc).

Mon, 10/03/2011 - 11:15 | Link to Comment LookingWithAmazement
LookingWithAmazement's picture

AEP says:

"A US double-dip is not yet a foregone conclusion. America’s M3 money supply is last growing decently again at 5.6pc, which would in normal circumstances signal some recovery next year. The latest GDP and confidence data in the US have not been as bad as feared."

http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/8802462/Protectionism-beckons-as-leaders-push-world-into-Depression.html

No crisis.

Mon, 10/03/2011 - 11:26 | Link to Comment d00daa
d00daa's picture

ECRI (which has never incorrectly called a recession - NEVER) says:

"We don’t make these calls lightly. When we make them, it’s because there’s an overwhelming objective message coming out of our forward-looking indicators. What is going on with the leading indicators is wildfire; it’s not reversible.”

http://www.zerohedge.com/news/ecris-achutan-says-us-entering-new-recession

one can only hope that you don't trade how you troll.  bear markets actually do exist.  really, they do.

Mon, 10/03/2011 - 10:54 | Link to Comment slewie the pi-rat
slewie the pi-rat's picture

the japan JIT supply issues are o-v-e-r, BiChez!

  • "Japan supply chain issues are over, but exchange rates and raw material prices are hurting our profit." (Transportation Equipment)

we have it in MSM and zH print from an anon-i-mouse "respondent" no less!!!!

wheeee!!!!

arnie gunderson [  Fairewinds Associates, Inc | Leveling the Playing Field ]  sez the tent for fuk_u #1 is "almost ready" so that's a relief , eh? 

he is also pretty pissed that the fuking japanese are now incinerating radioactive stuff which would be treated elsewhere as nukuler waste which means all the fuking experts together, world-wide, would have no idea what to doodooo w/ it! 

arnie thinks the [moronic, suicidal and homicidal?]  japanese are making the environ-mental disaster bigger by just burning contaminated stuff.  but he has no cred in the nukuler industry b/c he doesn't publish non-stop disinfo & L-I-E-S!!!

speaking of which, the ISM nannies did a heluva job, here, brownie!  we coulda had a recession, for pete's sake!  now, we have green shoots!  if they don't put a boosty-bustier & lipstick on this sow, we mighta had calls for more LSAP QEIII!  now, we can just take over Niger, instead!

Mon, 10/03/2011 - 11:22 | Link to Comment azzhatter
azzhatter's picture

some guy in north carolina made 7 tool boxes last month. rally on

Mon, 10/03/2011 - 11:42 | Link to Comment Boxed Merlot
Boxed Merlot's picture

I'm not looking forward to "the day of visitation", and would gladly accept a reprieve, and neither do I want to be unprepared as I most certainly am.

This is welcome news, but even the heart of a comatose patient beats on it's own occasionally. imo.

Seek justice, love mercy.

Mon, 10/03/2011 - 11:53 | Link to Comment Georgesblog
Georgesblog's picture

This is a continuation of the State of Emergency in Agriculture, declared in 1934. It is still in effect, today. At that time, the cities and manufacturing were presented as the solution to the crisis. The result is that people abandoned the land, and their independence with it.

http://georgesblogforum.wordpress.com/2011/06/26/land-wealth-vs-debt-pro...

Mon, 10/03/2011 - 13:12 | Link to Comment asteroids
asteroids's picture

"Everyone Lies" - House

Wed, 10/12/2011 - 15:51 | Link to Comment karmete
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