Monday, June 02, 2008
Briefly: ISM manufacturing came in still below 50 but increasing MoM (48.6 > 49.6). This is not surprising because of last month's NACM services sharp rise.
Also notable on the ISM report was that the production index increased from 49.1 to 51.2. The NACM index isn't out yet, but it should be published today. Because NACM measures credit it is somewhat forward of ISM, much like NAR's pendings in relationship to existing sales.
Construction value was released and showed YoY and MoM declines. The contrast between public (MoM -0.3, YoY +6.8) and private (MoM -0.5, YoY -7.2) pretty much tells where we are in the cycle. Because of price increases in some inputs and stage-of-construction issues, these figures probably understate the real decline somewhat.
UK mortgages are dropping very significantly and there has been more bad bank news and economic news there. But the US is announcing more bank executives voted off the island, and Bloomberg is taking a skeptical look at accounting rules. So regardless of underlying good trends, don't expect a good day on the financials or on stocks overall!! Confidence is not there.
Oil trends somewhat down, and Asian markets firm a bit. This week's employment report is liable to surprise on the downside based on claims and Federal Unemployment Taxes (FUT).