The strategy to keep everyone utterly confused and merely chasing momentum and trends continues. After the surge in this morning's NFP report, driven entirely by statistical fudging and part-time jobs, which has sent the market higher by well over 1%, we next get a Services ISM update [4]for July according to which the US non-manufcaturing sector improved modestly, to 52.6, on expectations of an unchanged print at 52.1, making the case for NEW QE even more distant. But wait, just to keep everyone totally baffled with BS, the ISM says that the employment index dipped below 50 for the first time since 2011, printing at 49.3 from 52.3: in other words, the employment in the US services sector is now contracting, something which the NFP number roundly denied. Confusion? Mutual exclusivity? It doesn't matter to algos, who are confident that the Fed will certainly launch more QE with the S&P at 2012 highs no matter what the facts say.
[5]
Of course, the punchline continue to be the respondents who see only downside. But this too is irrelevant.
- "The general economy and unemployment are keeping our business flat." (Health Care & Social Assistance)
- "Beginning to see effects of slowing economy. New orders are down versus same time last year." (Information)
- "Business is slowing; input costs are weakening." (Agriculture, Forestry, Fishing & Hunting)
- "Seeing a slight uptick in sales revenue." (Public Administration)
- "Things have not changed too much this past month; however, we are seeing more aggressive marketing/sales efforts by suppliers hungry for business." (Transportation & Warehousing)
- "Overall, we are still seeing growth over last year, but the sequential growth has gone flat to negative." (Wholesale Trade)