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Originally Posted by donsutherland1  As has been the trend in recent economic data toward somewhat greater strength than expected in the consensus forecast by economists, the ISM's manufacturing index showed ever so slight expansion (50.2 reading) and the construction spending contracted by a smaller amount than anticipated.
In the wake of the somewhat better than anticipated economic news, stock prices recovered from their early losses. Shortly after 11:06 am EDT, the Dow was up about 14 points. |
Supporting the small increase in the PMI, Supplier Deliveries (i.e., the proportion of survey respondents reporting
slower deliveries) rose to 55.7 versus 53.7. Though this seems to be a
relatively large increase given the miniature uptick in both the PMI and Production (51.5 vs 51.2), taken together, they suggest a slight improvement in manufacturing. Note that Supplier Deliveries is one of the Leading Indicators.
As for the price action for the balance of the trading trade, the Dow is at this moment down about 35. We've seen F, GM, Toyota and Honda auto sales and they have been roughly as expected: except for Honda, down sharply with pickups and SUVs bearing the brunt of the downturn.
However, offsetting the ever-so-slightly higher PMI was the Employment Index, down to 43.7 versus 45.5, contracting at a faster rate than the previous month, and marking its eighth straight month of contraction.
Now that all these numbers are out and in the market, I wouldn't be surprised to see the market eke out a modest gain and close the day essentially even or possibly on the upside, even if only modestly. We sold 'em on the expectations, and now we're buying 'em back on the news.