Expectations that the American manufacturing sector would expand after "briefly" contracting in June were promptly doused after the Manufacturing ISM printed at 49.8 [2], below expectations of an expansionary print of 50.2, and essentially unchanged from last month's 49.7. Where did offsetting growth come from? The most hollow of indicators - Inventory - which keeps on being built up in expectation of a demand spike that never comes. This is also the third miss in a row for the ISM, whose most watched component, the Employment index, slid from 56.6 to 52.0 confirming that the earlier ADP number was a total noisy fluke as usual. The question: is the data as bad as possible for it to be good for stocks remains unanswered, especially with some Knight algo wreaking havoc across all stocks as of this posting.
And the summary:
[3]
Here are the always interesting respondents:
- "Business has been up for the last seven consecutive months — strong customer orders coming in." (Machinery)
- "Automotive demand remains strong." (Fabricated Metal Products)
- "Resin pricing has bottomed out so customer orders have increased; it was pent-up demand." (Plastics & Rubber Products)
- "We have noticed a marked slowing in business overall. [We] have confirmed this with other companies in our industry as well." (Wood Products)
- "Forecasts remain high, but actual bookings remain flat." (Computer & Electronic Products)
- "Taking a conservative approach to spending including hiring, travel and inventory. U.S. economy seems stuck — at best — with little to no growth." (Apparel, Leather & Allied Products)
- "Business remains surprisingly strong." (Primary Metals)
- "Continued slowdown in government military sector spending in advance of the presidential elections has seriously impacted business performance." (Transportation Equipment)
- "Business is softening, requiring some down production days." (Furniture & Related Products)
- "General state of business this month is flat, with increasing economic uncertainty." (Chemical Products)