Submitted by Mark Hanna
Courtesy of MarketMontage. View original post here.
Stocks opened sharply lower this morning but has turned substantially on this ISM Manufacturing data that came in well above expectations. New orders were the strong point in this report (+4.5), while employment lagged, and prices surged – I guess your view of that jump in prices as a positive or a negative is dependent on quite a few factors.
Full report here.
“The PMI™ registered 54.2 percent, an increase of 1.1 percentage points from January’s reading of 53.1 percent, indicating expansion in manufacturing for the third consecutive month. This month’s reading reflects the highest PMI™ since June 2011, when the index registered 55.8 percent. The New Orders Index registered 57.8 percent, an increase of 4.5 percent over January’s reading of 53.3 percent, indicating growth in new orders for the second consecutive month. As was the case in January, all five of the PMI™’s component indexes — new orders, production, employment, supplier deliveries and inventories — registered in positive territory in February. In addition, the Backlog of Orders, Exports and Imports Indexes all grew in February relative to January.”
WHAT RESPONDENTS ARE SAYING …
- “Automotive is still going strong, which allows budgeting for capital equipment.” (Machinery)
- “Overall business is good.” (Food, Beverage & Tobacco Products)
- “Starting to pick up after a slower than normal year-end.” (Miscellaneous Manufacturing)
- “Continuing slowdown in defense spending.” (Computer & Electronic Products)
- “More RFQs coming in than the past three months.” (Nonmetallic Mineral Products)
- “Workload is growing; need qualified machinists.” (Fabricated Metal Products)
- “Europe is still a concern in the auto sector.” (Transportation Equipment)
- “Business seems to be on an uptick. The normal seasonal downturn for us has been much shorter and not as severe as in the past four years.” (Furniture & Related Products)
- “Demand indicators are robust. Supply is constrained. Pricing is escalating.” (Wood Products)
- “Customer demand has softened. At first, that decline was consistent with seasonal patterns but has persisted beyond historical periods.” (Chemical Products)
| MANUFACTURING AT A GLANCE FEBRUARY 2013 |
||||||
|---|---|---|---|---|---|---|
|
Index |
Series Index Feb |
Series Index Jan |
Percentage Point Change |
Direction |
Rate of Change |
Trend* (Months) |
| PMI™ | 54.2 | 53.1 | +1.1 | Growing | Faster | 3 |
| New Orders | 57.8 | 53.3 | +4.5 | Growing | Faster | 2 |
| Production | 57.6 | 53.6 | +4.0 | Growing | Faster | 6 |
| Employment | 52.6 | 54.0 | -1.4 | Growing | Slower | 41 |
| Supplier Deliveries | 51.4 | 53.6 | -2.2 | Slowing | Slower | 4 |
| Inventories | 51.5 | 51.0 | +0.5 | Growing | Faster | 2 |
| Customers’ Inventories | 46.5 | 48.5 | -2.0 | Too Low | Faster | 15 |
| Prices | 61.5 | 56.5 | +5.0 | Increasing | Faster | 7 |
| Backlog of Orders | 55.0 | 47.5 | +7.5 | Growing | From Contracting | 1 |
| Exports | 53.5 | 50.5 | +3.0 | Growing | Faster | 3 |
| Imports | 54.0 | 50.0 | +4.0 | Growing | From Unchanged | 1 |
| OVERALL ECONOMY | Growing | Faster | 45 | |||
| Manufacturing Sector | Growing | Faster | 3 | |||
*Number of months moving in current direction.
Disclosure Notice
Any securities mentioned on this page are not held by the author in his personal portfolio. Securities mentioned may or may not be held by the author in the mutual fund he manages, the Paladin Long Short Fund (PALFX). For a list of the aforementioned fund’s holdings at the end of the prior quarter, visit the Paladin Funds website at http://www.paladinfunds.com/holdings/blog
