Expectations were at 48 after last months reading of 43.4 so this is yet another case of economic data being much better then expected and goes along with the Intel announcement of raising guidance on Friday. It also suggests to us that the market is on the verge of melting up as the shorts finally throw up their hands on this economic recovery. The market sharply fell from the 1,300 level back this time last year and we could easily see a similar rebound. Won't be too hard because just about everybody is positioned for a sell off in the dreaded Sept - Oct period.
Inventories came in at 27.4 which will only add fuel to any rally. Businesses will be forced to restock empty shelves and parking lots. Everybody has seen the pictures of empty car lots. Those must all be filled not to mention it'll have to happen as demand returns to normal levels.
- The Institute for Supply Management-Chicago business barometer rose to 50.0 from 43.4 in July. Economists had forecast the index at 48.0.
- The employment component of the index rose to 38.7 from 35.3 in July. Prices paid rose to 50.0 from 35.0 and new orders jumped to 52.5 from 48.0. Production rose to 52.9 from 43.3.