ISM INDEX HITS 6 YEAR HIGH
3 May 2010 by Cullen Roche
7 Comments
There is little doubt about the recovery in U.S. manufacturing. Despite coming in a bit below expectations, this morning’s ISM data was once again strong. The headline figure of 60.4 (vs expectations of 61) shows another month of expansion in the U.S. economy. The underlying data continues to show strength where it’s most needed. The pace of new orders was very strong at 65.7 and employment rose to 58.5 (which likely bodes well for Friday’s jobs report). On the downside, prices rose to 78 – not a good sign for the easy money crowd. All in all, manufacturing continues its very positive trends.
Full results:
Respondent’s comments:
- “Finances continue to be tight, and we are decreasing safety stock levels to reduce inventory.” (Electrical Equipment, Appliances & Components)
- “Business conditions continue to improve. Actual sales exceeded budget for the third straight month.” (Food, Beverage & Tobacco Products)
- “Demand from automotive manufacturers has continued to improve month over month.” (Fabricated Metal Products)
- “We are finally seeing a turnaround.” (Primary Metals)
- “Upward price pressure still evident.” (Chemical Products)
Source: ISM
Why are we rallying 1.5% after miss on the ISM?
It’s Monday. Don’t you know that this is the day when all the mutual fund managers manipulate the market higher?
if you dig into the report, you will see that this report is very positive. why the expectation was higher i know not. but this report cannot be interpreted as negative by anybody, even rosenberg.
Are you denying that it was worse than expected? Since when is the market not based on expectations? If everyone thinks the ISM is going to be great and it come it at less than great then the market should not rally 2%.
I mean, I’m fine with it because I own stocks, but I trust the mutual fund monday explanation more than the ISM explanation.
drk, whatever.
interesting post by grannis on the relationship between ism manuf index and gdp: http://scottgrannis.blogspot.com/2010/05/ism-manufacturing-index-very-strong.html
my takeaway is that if jobs report looks good this friday, this augers well for the recovery/expasion transition…no longer a fear of double dip in 2Q based on withdrawal of stimulus
plenty of landmines out there that could cause expansion to stumble…but thinking that the drawdown of the stimulus is an important negative factor just has to be receding in the mind of anyone with an analytical neuron
The ISM report was very good, but market reaction was muted. Today’s buying has been a steady stream of bids most likely from mutual funds who are showing more strong inflows from retail.
This has happened every Monday for the lat 6 months or so. Without Mondays, the market would be negative on the year.
All data will be rosy as we near the election, it’s all rigged to the upside make no mistake about that.