Today’s 4-1-1

4 Things you should read:

• Why “Buy what you know” is flawed – BlackRock

 

• ‘60/40’: Version 2.0 – ETF.com

 

• Ignore the January Barometer – Barry Ritholtz

 

• Dealing with your schizophrenic investing tendencies – Forbes

1 Data and Market Summary:

• Manufacturing readings were weak in the US.  The ISM report came in at 51.3 vs expectations of 56.  New orders were particularly weak with a historic drop of 13.2 to just 51.2.  This is consistent with last week’s durable good’s orders.  The PMI report from Markit was a bit better at 53.7.  This was just shy of expectations of 53.9.  New orders were down to 53.9 from 56.1.  New export orders contracted at 48.4.

 

• Eurozone PMI hit 54, up from 52.7 in December. This is a 32 month high.

 

• China’s non-manufacturing came in at 53.4, an eleven month low.

 

• Fears of global weakness were sparked by the Chinese report which sent the Yen higher and renewed fears of a global slowdown and potentially larger problems in emerging markets.  The US markets were down over 2% and are now off 5%+ year to date.

1 Pretty Picture:

• How weird was today’s ISM reading?  Well, you can see how the national index has diverged from the regional indices (chart via Michael McDonough):