November ISM non-manufacturing index shows sector slowing

U.S. services sector activity slowed more than expected in November amid lingering concerns about trade tensions and worker shortages, which could revive fears about the economy’s health. The Institute for Supply Management (ISM) said on Wednesday its non-manufacturing activity index fell to a reading of 53.9 in last month from 54.7 in October. A reading above 50 indicates expansion in the services sector, which accounts for more than two-thirds of U.S. economic activity. Economists polled by Re


U.S. services sector activity slowed more than expected in November amid lingering concerns about trade tensions and worker shortages, which could revive fears about the economy’s health.
The Institute for Supply Management (ISM) said on Wednesday its non-manufacturing activity index fell to a reading of 53.9 in last month from 54.7 in October.
A reading above 50 indicates expansion in the services sector, which accounts for more than two-thirds of U.S. economic activity.
Economists polled by Re
November ISM non-manufacturing index shows sector slowing Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-12-04  Authors: jeff cox
Keywords: news, cnbc, companies, activity, index, month, sector, manufacturing, ism, slowing, nonmanufacturing, trade, reading, services, shows, fourth


November ISM non-manufacturing index shows sector slowing

Lead waitress Rhonda Abdullah serving the Taylor’s, James and Voncia of Aurora their lunch at the Welton Street Cafe that will turn 20 this year, the last-standing soul food restaurant in the Five Points neighborhood in Denver, Colorado on June 7, 2019.

U.S. services sector activity slowed more than expected in November amid lingering concerns about trade tensions and worker shortages, which could revive fears about the economy’s health.

The Institute for Supply Management (ISM) said on Wednesday its non-manufacturing activity index fell to a reading of 53.9 in last month from 54.7 in October. A reading above 50 indicates expansion in the services sector, which accounts for more than two-thirds of U.S. economic activity.

Economists polled by Reuters had forecast the index dipping to a reading of 54.5 in November.

The ISM reported on Monday that manufacturing activity contracted for the fourth straight month in November, with new orders falling back to around their lowest level since 2012. The continued manufacturing slump tempered growth expectations for the fourth quarter, which had been boosted by a rush of upbeat reports on the trade deficit, housing and business investment.


Company: cnbc, Activity: cnbc, Date: 2019-12-04  Authors: jeff cox
Keywords: news, cnbc, companies, activity, index, month, sector, manufacturing, ism, slowing, nonmanufacturing, trade, reading, services, shows, fourth


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A key manufacturing index shows the US remains in contraction territory

Manufacturing activity continued to lag in November amid a lag in inventories and new orders, according to the latest ISM Manufacturing reading released Monday. Though the ISM reading is usually reported as a simple number, it actually denotes the percentage of manufacturers planning to expand operations. The report shows that manufacturing “is stuck in a mild recession with little prospect of a real near-term revival. In a related release, the Markit manufacturing reading, known as the Purchasi


Manufacturing activity continued to lag in November amid a lag in inventories and new orders, according to the latest ISM Manufacturing reading released Monday.
Though the ISM reading is usually reported as a simple number, it actually denotes the percentage of manufacturers planning to expand operations.
The report shows that manufacturing “is stuck in a mild recession with little prospect of a real near-term revival.
In a related release, the Markit manufacturing reading, known as the Purchasi
A key manufacturing index shows the US remains in contraction territory Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-12-02  Authors: jeff cox
Keywords: news, cnbc, companies, growth, reliable, points, expansion, territory, contraction, orders, manufacturing, reading, report, key, ism, remains, trade, index, shows


A key manufacturing index shows the US remains in contraction territory

Manufacturing activity continued to lag in November amid a lag in inventories and new orders, according to the latest ISM Manufacturing reading released Monday.

The reading came in at 48.1 vs. an expectation of 49.4 and the previous month’s reading of 48.3.

Though the ISM reading is usually reported as a simple number, it actually denotes the percentage of manufacturers planning to expand operations. A reading below 50 represents contraction; November was the fourth straight month below the expansion level.

Stocks fell on the report, with the Dow Jones Industrial Average off more than 150 points at 10:30 am ET.

New orders slumped to 47.2, down 1.9 percentage points from October’s 49.1. Inventories, which are a key input for gross domestic product, came in at 45.5, down 3.4 points from the previous month.

The numbers come amid speculation about the pace of U.S. growth.

Recession worries have ebbed from earlier in the year, when the Treasury yield curve was inverted and flashing what has been a reliable 12-month recession indicator for the past 50 years. GDP growth has averaged around 2.4% in 2019, with the third quarter coming in at 2.1%. However, most forecasters expect the fourth quarter to come in under 2%.

The report shows that manufacturing “is stuck in a mild recession with little prospect of a real near-term revival. This will weigh on job growth and capex over the next few months, to the point where we are not ready to rule out a further [Federal Reserve] easing in January,” Ian Shepherdson, chief economist at Pantheon Macroeconomics, said in a note.

Manufacturing is considered a reliable bellwether for how the rest of the economy is doing, though it comprises only about one-fifth of GDP.

Nearly all of the key ISM indicators were at contraction levels in November.

Employment was at 46.6, down 1.1 point for the month, while export orders fell 2.5 points to 47.9 as the U.S. and China continue to look for a resolution to a trade dispute that began more than a year and a half ago.

Supplier deliveries was one of the few metrics in expansion, rising 2.5 points to 52.

In a related release, the Markit manufacturing reading, known as the Purchasing Managers Index, indicated expansion, coming in at 52.6, just above expectations and a bit better than the 51.3 October reading.

The Markit PMI growth reflected an uptick in production and new orders as well as strength in employment indicators. It was the strongest reading in seven months.

Investors will get a close look Friday at the impact the manufacturing slowdown and trade war have had on the broader economy. The Labor Department’s nonfarm payrolls report comes down that day, with economists surveyed by Dow Jones expecting a sharp rebound in growth to 187,000 from November’s 128,000.


Company: cnbc, Activity: cnbc, Date: 2019-12-02  Authors: jeff cox
Keywords: news, cnbc, companies, growth, reliable, points, expansion, territory, contraction, orders, manufacturing, reading, report, key, ism, remains, trade, index, shows


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The lagging manufacturing sector may be about to rebound, according to a reliable indicator

Manufacturing activity has been contracting since the summer, according to the widely watched ISM manufacturing index, but that may be about to change. Natixis economist Joseph LaVorgna said the performance of semiconductor stocks has diverged sharply from the ISM recently, with the PHLX Semiconductor sector index (SOX) springing higher, while the ISM continues to point lower. Source: NatixisBank of America Merrill Lynch strategists also pointed to the rising SOX index as a signal that manufactu


Manufacturing activity has been contracting since the summer, according to the widely watched ISM manufacturing index, but that may be about to change.
Natixis economist Joseph LaVorgna said the performance of semiconductor stocks has diverged sharply from the ISM recently, with the PHLX Semiconductor sector index (SOX) springing higher, while the ISM continues to point lower.
Source: NatixisBank of America Merrill Lynch strategists also pointed to the rising SOX index as a signal that manufactu
The lagging manufacturing sector may be about to rebound, according to a reliable indicator Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-11-13  Authors: patti domm
Keywords: news, cnbc, companies, contraction, stocks, ism, sector, manufacturing, semiconductor, lagging, rebound, reliable, index, indicator, sox, according, lavorgna


The lagging manufacturing sector may be about to rebound, according to a reliable indicator

Chip stocks may be pointing the way to a rebound in the manufacturing economy.

Manufacturing activity has been contracting since the summer, according to the widely watched ISM manufacturing index, but that may be about to change.

Natixis economist Joseph LaVorgna said the performance of semiconductor stocks has diverged sharply from the ISM recently, with the PHLX Semiconductor sector index (SOX) springing higher, while the ISM continues to point lower. Typically the two move in tandem, and the divergence is unusual.

“There’s a massive gap between the two. … It suggests there should be some upside in the ISM,” he said. Chip manufacturers are economically sensitive, and they can improve and decline ahead of other sectors.

Source: Natixis

Bank of America Merrill Lynch strategists also pointed to the rising SOX index as a signal that manufacturing may be on the cusp of a rebound. “We are bullish macro,” they wrote. They said the surge in the SOX implies the ISM manufacturing index should be at a level greater than 55 over the next three months.

“These manufacturing cycles tend to be self-correcting. I’m guessing the sector self-corrects. The rest of the economy looks OK,” said LaVorgna, chief economist of the Americas. “Unless it leads to layoffs, which it hasn’t, it’s going to burn itself out.”

ISM manufacturing for October was 48.9, in contraction for a third month but improved over the 48.3 in September. Anything below 50 signals contraction. The November report is expected Dec. 2.

LaVorgna said he’s become convinced that the malaise in manufacturing will be short-lived since it is showing no sign of spreading into other parts of the economy. Manufacturing is also cyclical, and periods of contraction are normal during long business cycles, he said.

Source: Natixis


Company: cnbc, Activity: cnbc, Date: 2019-11-13  Authors: patti domm
Keywords: news, cnbc, companies, contraction, stocks, ism, sector, manufacturing, semiconductor, lagging, rebound, reliable, index, indicator, sox, according, lavorgna


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The lagging manufacturing sector may be about to rebound, according to a reliable indicator

Manufacturing activity has been contracting since the summer, according to the widely watched ISM manufacturing index, but that may be about to change. Natixis economist Joseph LaVorgna said the performance of semiconductor stocks has diverged sharply from the ISM recently, with the PHLX Semiconductor sector index (SOX) springing higher, while the ISM continues to point lower. Source: NatixisBank of America Merrill Lynch strategists also pointed to the rising SOX index as a signal that manufactu


Manufacturing activity has been contracting since the summer, according to the widely watched ISM manufacturing index, but that may be about to change.
Natixis economist Joseph LaVorgna said the performance of semiconductor stocks has diverged sharply from the ISM recently, with the PHLX Semiconductor sector index (SOX) springing higher, while the ISM continues to point lower.
Source: NatixisBank of America Merrill Lynch strategists also pointed to the rising SOX index as a signal that manufactu
The lagging manufacturing sector may be about to rebound, according to a reliable indicator Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-11-13  Authors: patti domm
Keywords: news, cnbc, companies, contraction, stocks, ism, sector, manufacturing, semiconductor, lagging, rebound, reliable, index, indicator, sox, according, lavorgna


The lagging manufacturing sector may be about to rebound, according to a reliable indicator

Chip stocks may be pointing the way to a rebound in the manufacturing economy.

Manufacturing activity has been contracting since the summer, according to the widely watched ISM manufacturing index, but that may be about to change.

Natixis economist Joseph LaVorgna said the performance of semiconductor stocks has diverged sharply from the ISM recently, with the PHLX Semiconductor sector index (SOX) springing higher, while the ISM continues to point lower. Typically the two move in tandem, and the divergence is unusual.

“There’s a massive gap between the two. … It suggests there should be some upside in the ISM,” he said. Chip manufacturers are economically sensitive, and they can improve and decline ahead of other sectors.

Source: Natixis

Bank of America Merrill Lynch strategists also pointed to the rising SOX index as a signal that manufacturing may be on the cusp of a rebound. “We are bullish macro,” they wrote. They said the surge in the SOX implies the ISM manufacturing index should be at a level greater than 55 over the next three months.

“These manufacturing cycles tend to be self-correcting. I’m guessing the sector self-corrects. The rest of the economy looks OK,” said LaVorgna, chief economist of the Americas. “Unless it leads to layoffs, which it hasn’t, it’s going to burn itself out.”

ISM manufacturing for October was 48.9, in contraction for a third month but improved over the 48.3 in September. Anything below 50 signals contraction. The November report is expected Dec. 2.

LaVorgna said he’s become convinced that the malaise in manufacturing will be short-lived since it is showing no sign of spreading into other parts of the economy. Manufacturing is also cyclical, and periods of contraction are normal during long business cycles, he said.

Source: Natixis


Company: cnbc, Activity: cnbc, Date: 2019-11-13  Authors: patti domm
Keywords: news, cnbc, companies, contraction, stocks, ism, sector, manufacturing, semiconductor, lagging, rebound, reliable, index, indicator, sox, according, lavorgna


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ISM manufacturing index October 2019

A gauge of U.S. manufacturing showed the sector continued to contract in October, the third straight month of slowdown amid global trade uncertainties. The purchasing manufacturing index from the Institute for Supply Management came in at 48.3% last month, compared with a 47.8% reading in September. The sector showed its first contraction in a few years in August, ending a 35-month expansion period where the PMI averaged 56.5%, according to ISM. The backlog of orders index was 44.1%, contracting


A gauge of U.S. manufacturing showed the sector continued to contract in October, the third straight month of slowdown amid global trade uncertainties.
The purchasing manufacturing index from the Institute for Supply Management came in at 48.3% last month, compared with a 47.8% reading in September.
The sector showed its first contraction in a few years in August, ending a 35-month expansion period where the PMI averaged 56.5%, according to ISM.
The backlog of orders index was 44.1%, contracting
ISM manufacturing index October 2019 Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-11-01  Authors: yun li, jeff cox
Keywords: news, cnbc, companies, ism, contraction, manufacturing, month, showed, index, 2019, sector, trade, inventories, orders, reading


ISM manufacturing index October 2019

A man using an angle grinder on a steel piece at a metal fabrication company on August 7, 2018 in Orange County, New York.

A gauge of U.S. manufacturing showed the sector continued to contract in October, the third straight month of slowdown amid global trade uncertainties.

The purchasing manufacturing index from the Institute for Supply Management came in at 48.3% last month, compared with a 47.8% reading in September. But it was below economists’ expectations of 49.1%. A number below 50% represents a contraction in the industry.

The sector showed its first contraction in a few years in August, ending a 35-month expansion period where the PMI averaged 56.5%, according to ISM. The manufacturing gauge had its lowest reading since June 2009 in September as exports dived amid the escalated trade war.

The continuing contraction showed the challenging environment U.S. manufacturers are faced with amid the escalated trade war between the U.S. and China. Manufacturing was once considered a big winner under the Trump administration with improvements in employment and activity over the past few years.

“Comments from the panel reflect an improvement from the prior month, but sentiment remains more cautious than optimistic,” Timothy Fiore, chair of the ISM Manufacturing Business Survey Committee, said in a statement.

The production index was only 46.2% in October, compared to the September reading of 47.3%. The backlog of orders index was 44.1%, contracting for the sixth straight month, versus the September reading of 45.1%, according to ISM.

Prices decreased for the fifth consecutive month and at a faster rate with the prices index registered 45.5% in October.

“Inputs — expressed as supplier deliveries, inventories and imports — were again lower in October, due primarily to supplier delivery contraction offset by improvements in inventories,” Fiore said.

However, the latest report also showed signs of recovery, making some on Wall Street believe the manufacturing slowdown won’t be accelerating. New orders, employment and inventories all showed improvement last month.

“The outlook for nation’s factories isn’t growing any worse and the manufacturing recession isn’t intensifying,” Chris Rupkey, chief financial economist at MUFG, said in a note. “There are even some green shoots for the manufacturing sector as orders are picking up and orders lead the way forward for production and output and jobs.”


Company: cnbc, Activity: cnbc, Date: 2019-11-01  Authors: yun li, jeff cox
Keywords: news, cnbc, companies, ism, contraction, manufacturing, month, showed, index, 2019, sector, trade, inventories, orders, reading


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The jobs numbers are out on Friday, but there’s another report that could be much more important

ISM manufacturing data is expected to show a contraction in activity in October, for a third month in a row. ISM Manufacturing data is due at 10 a.m. The manufacturing sector is dwarfed by the services sector, but economists have been monitoring services to make yjr weakness is not spreading. ISM services data is released on Tuesday. Negative 55,000 manufacturing jobs is a pretty stark number, even if it’s heavily distorted by the GM stroke.


ISM manufacturing data is expected to show a contraction in activity in October, for a third month in a row.
ISM Manufacturing data is due at 10 a.m.
The manufacturing sector is dwarfed by the services sector, but economists have been monitoring services to make yjr weakness is not spreading.
ISM services data is released on Tuesday.
Negative 55,000 manufacturing jobs is a pretty stark number, even if it’s heavily distorted by the GM stroke.
The jobs numbers are out on Friday, but there’s another report that could be much more important Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-10-31  Authors: patti domm
Keywords: news, cnbc, companies, report, numbers, services, economy, theres, sector, jobs, data, expected, ism, hill, important, manufacturing


The jobs numbers are out on Friday, but there's another report that could be much more important

Jobs, on the other hand, have been strong, as has the consumer, the biggest driver of the economy. Economists expect that just 75,000 jobs were created in October, and the unemployment rate is expected to tick up slightly to 3.6% from 3.5%, according to Dow Jones. Hourly earnings are expected to rise by 0.3%, or 3% year over year. The 8:30 a.m. ET report follows September’s surprisingly weak 136,000 payrolls.

ISM manufacturing data is expected to show a contraction in activity in October, for a third month in a row. Manufacturing has been at the heart of the economy’s sluggishness, with a drop in business investment a big reason for the third quarter’s sluggish 1.9% growth pace.

An update on manufacturing activity Friday could provide a much more useful picture of the economy than the October employment report, which is expected to be unusually weak due to the General Motors strike.

“We already know the manufacturing sector is in recession for three reasons—trade tensions, the Boeing MAX, and the GM strike,” said Ward McCarthy, chief financial economist at Jefferies. The end of the GM strike “will take one of the nails out of the coffin.”

ISM Manufacturing data is due at 10 a.m. ET, and economists expect a reading of 49.1, better than the 47.8 in September. Any number below 50 represents declining activity, and ISM will also be muddied by slower activity due to the GM strike.

Jon Hill, BMO fixed income strategist, said regional Fed surveys have not been nearly as negative as ISM. “But of course we got Chicago PMI which was the weakest in three-and-a-half years,” Hill said. “We’re getting a lot of mixed messages on the manufacturing front. It’s not a question of whether it’s slowing. It’s just a question of how deeply it’s slowing.”

McCarthy said he expects ISM data to pick up next month with the end of the GM stroke. “That should help the manufacturing over the next two or three months look better than the prior three months. Manufacturing won’t come out of recession until they start making the MAX again,” he said.

Some strategists say the market would respond if the ISM surprises to the upside.

“The jobs number will be big, but the ISM could be bigger. If that turns up, like Markit [PMI] suggested, that could be a big deal,” said Leuthold Group Chief Investment Strategist James Paulsen.

The manufacturing sector is dwarfed by the services sector, but economists have been monitoring services to make yjr weakness is not spreading. .

“At the end of the day, nonmanufacturing is way more important. It reflects the vast majority of the U.S. economy,” said Hill. ISM services data is released on Tuesday. “We’re a services economy. Until we see broad-based spillover on the servcies side, it makes sense for the Fed to stay on hold.”

As for the employment report, the government has reported that 46,000 GM workers were off the payrolls in October due to the strike, which has now ended. On top of that, workers at GM suppliers could also have been affected, and Refinitiv estimates a decline of 50,000 in manufacturing jobs alone.

“There will be a lot of focus on the payrolls. Negative 55,000 manufacturing jobs is a pretty stark number, even if it’s heavily distorted by the GM stroke. The question is do you see spillover in the private sector side,” said Hill. “It depends where you see private sector services hiring.”

McCarthy said he expects to see 90,000 jobs. “There’s going to be some consequences along the supply chain as well,” he said.


Company: cnbc, Activity: cnbc, Date: 2019-10-31  Authors: patti domm
Keywords: news, cnbc, companies, report, numbers, services, economy, theres, sector, jobs, data, expected, ism, hill, important, manufacturing


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A key number on Thursday will reveal whether the economic slowdown is spreading

So far, businesses in the services sector have been growing at a decent pace and withstanding the headwinds that have hit manufacturing. Earlier this week, ISM U.S. manufacturing purchasing managers’ index dropped to a surprising 47.8 for September, the second month of contraction, and a decade low. Both reports are being watched closely after Tuesday’s shockingly weak ISM manufacturing report set off new fears a manufacturing recession could spill into the broader economy. “So far at least, the


So far, businesses in the services sector have been growing at a decent pace and withstanding the headwinds that have hit manufacturing. Earlier this week, ISM U.S. manufacturing purchasing managers’ index dropped to a surprising 47.8 for September, the second month of contraction, and a decade low. Both reports are being watched closely after Tuesday’s shockingly weak ISM manufacturing report set off new fears a manufacturing recession could spill into the broader economy. “So far at least, the
A key number on Thursday will reveal whether the economic slowdown is spreading Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-10-02  Authors: patti domm
Keywords: news, cnbc, companies, sector, spreading, number, economic, reveal, report, economy, key, services, dow, ism, manufacturing, cut, week, spending, slowdown


A key number on Thursday will reveal whether the economic slowdown is spreading

Economists expect that services remained strong in September but at a slightly slower pace than in August. The next reading to gauge the progress of that sector is Thursday’s 10 a.m. ET release of the September ISM nonmanufacturing index. According to Dow Jones, the consensus forecast is 55.3, a number that shows a healthy rate of expansion though that would be down from August’s 56.4.

So far, businesses in the services sector have been growing at a decent pace and withstanding the headwinds that have hit manufacturing.

Anything above 50 shows expansion. Earlier this week, ISM U.S. manufacturing purchasing managers’ index dropped to a surprising 47.8 for September, the second month of contraction, and a decade low.

Following that report, ADP’s private sector payroll data Wednesday was slightly softer than some expected at 135,000 and included revisions that cut 38,000 from August’s payrolls report.

“If for some reason, [ISM services] drops to 52, 53, anything that’s below consensus … that would raise the concern that services output is beginning to slow as well, and you’d get that same picture if employment is weak as well,” said Michael Gapen, chief U.S. economist at Barlcays.

The big report for the week comes Friday, when the monthly employment report is released, and it is expected to show 145,000 jobs were added in September, according to Dow Jones.

Both reports are being watched closely after Tuesday’s shockingly weak ISM manufacturing report set off new fears a manufacturing recession could spill into the broader economy. That sent stocks reeling and bond yields lower. The Dow was down as much as 598 points Wednesday, after a 343-point decline Tuesday.

“So far at least, the ISM services sector seems to be holding up pretty well, which is really important. It’s basically 85% of the U.S. economy,” said Ward McCarthy, chief financial economist at Jefferies. “The decline in manufacturing has been ongoing since the beginning of the trade war and has been exacerbated by the Boeing 737 Max problems and now the GM strike.”

As stocks sold off, the fed funds futures market began to indicate a greater chance of a Fed rate cut for the Oct. 29 and 30 meeting. Before ISM manufacturing, the odds for a quarter point cut were about 40%, but they have since shot up more than 75%.

Gapen said a first big warning sign about the consumer, which has been propping up the economy, came Friday when the personal consumption and spending data showed consumer spending slowed in August, Household spending edged up just 0.1%, compared to growth in the first seven months of the year which averaged 0.5% a month.


Company: cnbc, Activity: cnbc, Date: 2019-10-02  Authors: patti domm
Keywords: news, cnbc, companies, sector, spreading, number, economic, reveal, report, economy, key, services, dow, ism, manufacturing, cut, week, spending, slowdown


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US manufacturing survey shows worst reading in a decade

A gauge of U.S. manufacturing slumped to the lowest level in more than 10 years in September as exports dived amid the escalated trade war. “We have now tariffed our way into a manufacturing recession in the U.S. and globally,” said Peter Boockvar, chief investment officer at Bleakley Advisory Group. New orders, backlog, raw materials inventories exports and imports also contracted across the board last month, ISM data showed. The deeper contraction in the manufacturing sector is the latest sign


A gauge of U.S. manufacturing slumped to the lowest level in more than 10 years in September as exports dived amid the escalated trade war. “We have now tariffed our way into a manufacturing recession in the U.S. and globally,” said Peter Boockvar, chief investment officer at Bleakley Advisory Group. New orders, backlog, raw materials inventories exports and imports also contracted across the board last month, ISM data showed. The deeper contraction in the manufacturing sector is the latest sign
US manufacturing survey shows worst reading in a decade Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-10-01  Authors: yun li
Keywords: news, cnbc, companies, survey, reading, decade, manufacturing, shows, sector, recession, orders, lowest, trade, ism, month, contraction, trump, worst


US manufacturing survey shows worst reading in a decade

A gauge of U.S. manufacturing slumped to the lowest level in more than 10 years in September as exports dived amid the escalated trade war.

The U.S. manufacturing Purchasing Managers’ Index from the Institute for Supply Management plunged to 47.8% in September, the lowest since June 2009, marking the second consecutive month of contraction. Any figure below 50% signals a contraction.

The new export orders index tanked to only 41%, the lowest level since March 2009, down from the August reading of 43.3%, ISM data showed.

“We have now tariffed our way into a manufacturing recession in the U.S. and globally,” said Peter Boockvar, chief investment officer at Bleakley Advisory Group.

The report fanned fears of a recession and hit the stock market. The Dow Jones Industrial Average lost more than 150 points, erasing earlier gains on Tuesday.

“Global trade remains the most significant issue, as demonstrated by the contraction in new export orders that began in July 2019. Overall, sentiment this month remains cautious regarding near-term growth,” Timothy Fiore, ISM chair, said in a statement.

The ISM employment gauge for the sector dropped to the lowest since January 2016, primarily driven by a lack of demand. New orders, backlog, raw materials inventories exports and imports also contracted across the board last month, ISM data showed.

“There is no end in sight to this slowdown, the recession risk is real,” Torsten Slok, chief economist at Deutsche Bank said in a note on Tuesday following the report.

The deeper contraction in the manufacturing sector is the latest sign that the escalated trade war between the U.S. and China is taking a big bite from the economy. Manufacturing was once considered a big winner under the Trump administration with improvement in employment and activity over the past few years.

President Donald Trump blamed high interest rates and a strong dollar for the weakness in manufacturing, saying in a tweet Tuesday the central bank “allowed the Dollar to get so strong … that our manufacturers are being negatively affected. Fed Rate too high.”

The sector contracted for the first time in more than three years in August, ending a 35-month expansion period where the PMI averaged 56.5%, according to ISM.

“Comments from the panel reflect a continuing decrease in business confidence,” Fiore said.


Company: cnbc, Activity: cnbc, Date: 2019-10-01  Authors: yun li
Keywords: news, cnbc, companies, survey, reading, decade, manufacturing, shows, sector, recession, orders, lowest, trade, ism, month, contraction, trump, worst


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The bond market’s roller coaster ride could continue until there’s a clear signal either way on recession

Strategists said it appears the Bank of Japan will buy fewer longer duration bonds in its quantitative easing program, and that could pressure rates higher. But then in the U.S., ISM manufacturing fell to 47.8% in September, its second month of contraction, and the lowest since June 2009. Schumacher said Tuesday was the 22nd day in 2019 with a 10 basis point or more move in the 10-year yield. That was the year of the presidential election, but also the Brexit vote, after which the 10-year yield


Strategists said it appears the Bank of Japan will buy fewer longer duration bonds in its quantitative easing program, and that could pressure rates higher. But then in the U.S., ISM manufacturing fell to 47.8% in September, its second month of contraction, and the lowest since June 2009. Schumacher said Tuesday was the 22nd day in 2019 with a 10 basis point or more move in the 10-year yield. That was the year of the presidential election, but also the Brexit vote, after which the 10-year yield
The bond market’s roller coaster ride could continue until there’s a clear signal either way on recession Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-10-01  Authors: patti domm
Keywords: news, cnbc, companies, rates, ism, theres, roller, investors, 10year, higher, way, recession, continue, clear, moves, signal, ride, rate, yields, coaster, yield, markets, manufacturing


The bond market's roller coaster ride could continue until there's a clear signal either way on recession

It’s usually stock investors who feel the thrill of rising stock prices, and despair when there’s a sharp collapse.

But for the past two months, bond investors have been on a similar roller coaster ride, with volatility at multi-year highs. Treasury yields snapped higher early Tuesday, rising with Japanese yields, but then fell sharply as investors feared that a contraction in September’s ISM manufacturing report means the manufacturing sector is heading for recession.

“We’re in a situation where the market is debating whether we’re on the precipice of recession. Some days we get information that seems to say no, and some days we get information that seems to say yes,” said Ralph Axel, Bank of America Merrill Lynch rate strategist. “The difference between those two answers is a very large range for where rates are going to go.”

The 10-year yield Tuesday started the day moving higher, along side the Japanese 10-year and other global bonds, following a weak auction in Japan. Strategists said it appears the Bank of Japan will buy fewer longer duration bonds in its quantitative easing program, and that could pressure rates higher. Yields, or rates, move opposite price. The 10-year Japanese government bond has a negative yield, and it rose by 6.5 basis points to negative 0.16%.

But then in the U.S., ISM manufacturing fell to 47.8% in September, its second month of contraction, and the lowest since June 2009. The fear is that readings will continue under 50, a sign of contraction, and the weakness could spread.

The 10-year moved from a high of 1.755% to a low of 1.647%. During a wild period of volatility this summer, the 10-year got to 1.43% on Sept. 3, but then rebounded to as high as 1.9% on Sept. 13. The whole Treasury curved moved with it.

The movements in the bond market are widely watched on Wall Street, but they are ultimately felt on Main Street. The bench mark 10-year yield affects a variety of business and consumer loans, and as it fell in August and into early September, so did the interest rates on home mortgages.

“We’ve had pretty good moves in the last month,” said Michael Schumacher, director, rates strategy at Wells Fargo. “It’s been possible to make or lose a lot of money in a hurry. For long only investors, it’s been a pretty good year, and they may not want to play much longer.”

Schumacher said Tuesday was the 22nd day in 2019 with a 10 basis point or more move in the 10-year yield. In 2018 and 2017, there were just eight such moves in each year, but in 2016, there were 39 big moves. That was the year of the presidential election, but also the Brexit vote, after which the 10-year yield fell as low as 1.32%.

Wells Fargo expects the 10-year to be at 1.70% at the end of the year, while Bank of America sees a 1.25% 10-year yield.

Other periods of heightened volatility include 2015, when China devalued its currency; 2013 during the taper tantrum, and 2011 during the European debt crisis.

Axel said the market could continue to be gripped by events beyond the economy. “The level of geopolitical risk is very high,” he said, noting such things as the attack on Saudi Arabia’s oil production last month, as well as risk from the trade war.

Both strategists said the impeachment process could bring unforeseen risks for markets, and it could affect such things as the normal workings of Washington, including a budget deal.

“Our basic thesis is rates will be choppy for awhile and gradually move up,” said Schumacher. “These moves of 10 to 15 either way … I don’t think they’ve spooked too many people but they could if they keep going.”

Schumacher said the bond rally after the ISM report was probably over done, but some investors worry weakness in manufacturing could hit the service sector.

“We’re we’re not forecasting a recession. But if you start to see ISM declines, steep declines in these things you really have to consider it,” said Shawn Snyder, head of investment strategy at Citi Personal Wealth Management.

As the Treasury yields swooshed lower, fed fund futures also had a dramatic move, with expectations for an October rate rising from 42% Monday to 62% after the ISM report, according to the CME Fed Watcher.

In recent weeks, the number of positive economic surprises have risen and recession fears have abated, along with expectations for Fed rate cuts.

“Citi’s view heading into this is they’re probably done with rate cuts for the year, due to inflation ticking higher. If you continue to see downside in this manufacturing data, or the services data, then I would expect them to cut again,” said Snyder.


Company: cnbc, Activity: cnbc, Date: 2019-10-01  Authors: patti domm
Keywords: news, cnbc, companies, rates, ism, theres, roller, investors, 10year, higher, way, recession, continue, clear, moves, signal, ride, rate, yields, coaster, yield, markets, manufacturing


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Here’s what happened to the stock market on Tuesday

The Nasdaq Composite fell 1.13% to 7,908.68 The sharp decline came after disappointing manufacturing data spooked investors. Stocks fell after the Institute for Supply Management said U.S. manufacturing activity fell last month to its lowest level in a decade as the U.S.-China trade worries drag on. The ISM report follows the release of weak manufacturing data from Europe. Investors came into Tuesday’s session, the first of the fourth quarter, amid improved sentiment around U.S.-China trade rela


The Nasdaq Composite fell 1.13% to 7,908.68 The sharp decline came after disappointing manufacturing data spooked investors. Stocks fell after the Institute for Supply Management said U.S. manufacturing activity fell last month to its lowest level in a decade as the U.S.-China trade worries drag on. The ISM report follows the release of weak manufacturing data from Europe. Investors came into Tuesday’s session, the first of the fourth quarter, amid improved sentiment around U.S.-China trade rela
Here’s what happened to the stock market on Tuesday Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-10-01  Authors: fred imbert
Keywords: news, cnbc, companies, fell, heres, market, happened, report, disappointing, came, trade, ism, stock, uschina, worries, data, manufacturing


Here's what happened to the stock market on Tuesday

The Dow dropped 343.79 points, or 1.27% to 26,573.04. The S&P 500 slid 1.23% to close at 2.940.25. The Nasdaq Composite fell 1.13% to 7,908.68 The sharp decline came after disappointing manufacturing data spooked investors.

Stocks fell after the Institute for Supply Management said U.S. manufacturing activity fell last month to its lowest level in a decade as the U.S.-China trade worries drag on. The ISM report follows the release of weak manufacturing data from Europe. The disappointing numbers led investors to sell equities in favor of U.S. bonds. President Donald Trump quickly pointed the finger at the Federal Reserve for the weakness in manufacturing, saying in a tweet rates are too high and the dollar is too strong.

Investors came into Tuesday’s session, the first of the fourth quarter, amid improved sentiment around U.S.-China trade relations. However, the market is interpreting the ISM report as a sign the trade war is taking an increasing toll on the economy, sending jitters through Wall Street.


Company: cnbc, Activity: cnbc, Date: 2019-10-01  Authors: fred imbert
Keywords: news, cnbc, companies, fell, heres, market, happened, report, disappointing, came, trade, ism, stock, uschina, worries, data, manufacturing


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