Investment Chart Kondratiev Wave

Investment Chart Kondratiev Wave

Thursday, 1 March 2012

ISM 52.4: everything down except inventories and prices

The ISM was a disappointment and it is a big blow for people that hoped the Citigroup Surprise Index would continue to surprise to the upside. The consensus thought it would be 54.5, like my little model. Orders/inventories declined for the second month in a, to make things worse: more people will adjust downward their expectations for ISM in the coming month(s). My model sees a renewed rise to 56. Benderly thinks that the ISM will move slowly with final demand and retail sales as inventories/sales are normal (and no catch up is necessary).

ISM prices rose, no surprise as commodity prices rose.
The PMI’s of other countries were pretty much unchanged or down a bit and that caused the upward trend to stop.

Still the mood of the respondents was up given their remarks: WHAT RESPONDENTS ARE SAYING ...
• "Business is holding steady. Concern over commodity prices ongoing." (Chemical Products)
• "Still somewhat cautious about recovery. Expecting a good year, but not seeing orders yet." (Machinery)
• "Demand remains consistent to strong on all levels." (Paper Products)
• "Demand from auto makers is getting stronger." (Fabricated Metal Products)
• "Manufacturing is busy. Spending money on new equipment to accommodate customer demands. Material prices are staying in check." (Food, Beverage & Tobacco Products)
• "There seems to be a much more positive outlook for the economy. Customers are ordering material for stock rather than just working hand-to-mouth." (Fabricated Metal Products)
• "Global GDP softening and beginning to impact the demand chain." (Computer & Electronic Products)
• "Production is busy — several new large projects." (Primary Metals)
• "Customers [are] lowering inventory levels, anticipating price decrease due to third-party published reports on materials." (Plastics & Metal Products)
• "We are optimistic about the U.S. market this year, a little hesitant about what may happen in Europe and unsure about China." (Transportation Equipment)
• "Shipments are increasing over last year. Waiting to see if the trend continues." (Wood Products)

No comments:

Post a Comment