Submitted by Mark Hanna
Courtesy of MarketMontage. View original post here.
The S&P 500 gapped over the February highs and has continued up. Right now all those distribution days clustered together are just an after thought. The index will now regain the ascending channel it had been traveling since mid November, and a close around these levels should bode positive go forward.
ISM Non Manufacturing is creating a new leg up with the small beat. Very similar to the Mfg report in that new orders and prices are up but employment down. Full report here.
“The NMI™ registered 56 percent in February, 0.8 percentage point higher than the 55.2 percent registered in January. This indicates continued growth at a slightly faster rate in the non-manufacturing sector. This month’s reading also reflects the highest NMI™ since February 2012, when the index registered 56.1 percent. The Non-Manufacturing Business Activity Index registered 56.9 percent, which is 0.5 percentage point higher than the 56.4 percent reported in January, reflecting growth for the 43rd consecutive month. The New Orders Index increased by 3.8 percentage points to 58.2 percent, and the Employment Index decreased 0.3 percentage point to 57.2 percent, indicating growth in employment for the seventh consecutive month. The Prices Index increased 3.7 percentage points to 61.7 percent, indicating prices increased at a faster rate in February when compared to January. According to the NMI™, 13 non-manufacturing industries reported growth in February. The majority of respondents’ comments reflect a growing optimism about the trend of the economy and overall business conditions.”
WHAT RESPONDENTS ARE SAYING …
- “Our business is beginning to turn up slightly.” (Health Care & Social Assistance)
- “Business seems to be improving; RFQ volume and orders also up.” (Management of Companies & Support Services)
- “Continuing to see slight uptrend in activity, primarily related to 1st quarter initiatives started.” (Finance & Insurance)
- “Construction market showing some positive signs.” (Real Estate, Rental & Leasing)
- “The economy continues to slowly pick up, perhaps at an even faster pace than had been previously projected. New housing permits and business licenses are at a multiyear high, although still lower than pre-recession.” (Public Administration)
- “February bouncing back to forecast levels, which was 11 percent over 2012.” (Wholesale Trade)
- “Business is picking up; more projects to bid and things are improving.” (Construction)
| ISM NON-MANUFACTURING SURVEY RESULTS AT A GLANCE COMPARISON OF ISM NON-MANUFACTURING AND ISM MANUFACTURING SURVEYS* FEBRUARY 2013 |
|||||||||
|---|---|---|---|---|---|---|---|---|---|
| Non-Manufacturing | Manufacturing | ||||||||
| Index | Series Index Feb |
Series Index Jan |
Percent Point Change |
Direction | Rate of Change |
Trend** (Months) |
Series Index Feb |
Series Index Jan |
Percent Point Change |
| NMI™/PMI™ | 56.0 | 55.2 | +0.8 | Growing | Faster | 38 | 54.2 | 53.1 | +1.1 |
| Business Activity/Production | 56.9 | 56.4 | +0.5 | Growing | Faster | 43 | 57.6 | 53.6 | +4.0 |
| New Orders | 58.2 | 54.4 | +3.8 | Growing | Faster | 43 | 57.8 | 53.3 | +4.5 |
| Employment | 57.2 | 57.5 | -0.3 | Growing | Slower | 7 | 52.6 | 54.0 | -1.4 |
| Supplier Deliveries | 51.5 | 52.5 | -1.0 | Slowing | Slower | 2 | 51.4 | 53.6 | -2.2 |
| Inventories | 54.0 | 47.0 | +7.0 | Growing | From Contracting | 1 | 51.5 | 51.0 | +0.5 |
| Prices | 61.7 | 58.0 | +3.7 | Increasing | Faster | 41 | 61.5 | 56.5 | +5.0 |
| Backlog of Orders | 54.5 | 49.0 | +5.5 | Growing | From Contracting | 1 | 55.0 | 47.5 | +7.5 |
| New Export Orders | 60.5 | 55.5 | +5.0 | Growing | Faster | 2 | 53.5 | 50.5 | +3.0 |
| Imports | 52.5 | 51.0 | +1.5 | Growing | Faster | 2 | 54.0 | 50.0 | +4.0 |
| Inventory Sentiment | 62.5 | 64.0 | -1.5 | Too High | Slower | 189 | N/A | N/A | N/A |
| Customers’ Inventories | N/A | N/A | N/A | N/A | N/A | N/A | 46.5 | 48.5 | -2.0 |
* Non-Manufacturing ISM Report On Business® data is seasonally adjusted for Business Activity, New Orders, Prices and Employment. Manufacturing ISM Report On Business® data is seasonally adjusted for New Orders, Production, Employment and Supplier Deliveries.
** 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
