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U.S. ISM Manufacturing

10/03/2011
October’s first major economic report continues the recent trend of better-than-forecast economic data. While multiple analysts continue to suggest an impending recession, I expect that ominous circumstance will be avoided. In fact, a consequence of the recent better-than-forecast data is that Q3 GDP might print above 2%.
 
Despite this news, a continued “crisis of confidence” ails the S&P 500® Index and is pressuring its value back toward the August 9 low for the year of 1101.54. Keep in mind, it is very difficult to measure and reverse the damage from a confidence crisis. The failures of policy makers on both sides of the Atlantic is clearly the root cause. The markets are currently pricing in an ability to reverse the damage inflicted by policy makers; however, cash positioning should not be used as a defensive mechanism.
 
Let’s take a look at the U.S. ISM Manufacturing report. . .
 
•     U.S. ISM Manufacturing was reported at 51.6 for September, ahead of both consensus 50.5 and the prior month’s 50.6.
•     The Index remained above the 50 growth/contraction line for the 26th consecutive month.
•     Production index rose to 51.2 from last month’s 48.6.
•     New orders were unchanged at 49.6 – the weakest component of the report.
•     Prices paid rose to 56 from 55.5.
•     Employment index rose to 53.8 from 51.8.
•     Export orders rose to 53.5 from 50.5.
•     Inventory index fell to 52 from 52.3.
•     Construction spending, also reported this morning, rose 1.4%, reversing last month’s 1.4% decline.
 
 
U.S. ISM Manufacturing Year To Date 

Source:  Bloomberg 

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