Out Fox The $treet

The ISM Non-Manufacturing index came in at a surprisingly strong 53.2 today better then the 52 expected by economists. The market is up an average 1.5% today mainly due to the surprise jump, but also some relieve that the economy is not headed back down. With the reading of 51.5 in August, the major services sector was showing signs of possibly dipping below 50 signaling a potential double dip. This reading above 53 helps solidify the recovery. Most of the sectors within the index showed positive changes from last month. New Orders jumped to 54.9, Inventories declined back to sub 50, Employment increased 2 points, and Prices Paid scaled back ever so slightly though still too high above 60. The only major issue in the report is that Business Activity actually dropped from 54.4 to 52.8. Business Activity has usually been seen as a better indicator of the health of the services sector and September was the first month that the Business Activity wasn't 2-3 points above the overall ...

After some weak numbers for June, alot of the economic data for July is started to come in ahead of estimates. Clearly June was a pause because of the fears in the global economy due to the various issues repeated ad nausem. Now with just about all of the issues out of the way including news today that some 75% of the oil leaked in the Gulf of Mexico having been captured or evaporated, the economy can get back to its recovery. Today the July ISM Services or non-Manufacturing report came in at a strong 54.3 up from the 53.8 in June and easily above estimates that expected a decline. The Business Activity index remained a robust 57.4 showing that growth is likely above the headline numbers that tend to be sentiment based. New Orders rose to 56 and Inventories and Prices Paid relaxed from levels that were too high last month. All in all it was a very solid report and market is slowly coming to realize that we're likely headed towards a strong recovery in the 2H versus the double dip....

The ISM Services Index is set to be reported on Tuesday and will be very crucial to the market direction. According to Bloomberg economists expect a whopping bullish reading of 55. Are they serious? The markets are down some 17% and the ISM Services will only fall slightly from the 55.4 in May. Sure July could easily fall off a cliff, but if June is still as strong as a 55 then I don't understand the fears in the market. What gets me is if the number comes in at 54 and the market acts all surprised. To us, even a 54 would be bullish and indicative that the selloff was unwarranted. The consensus range is from 53.5 to 56. Take the low end of the range and don't act surprised. After all the only way to a double dip is for this index to fall consistently below 50. If June doesn't even drop below 54, this economy will need another shock beyond Europe or BP or the China slowdown. Market Consensus Before Announcement The composite index from the ISM non-manufacturing survey in Ma...

Contrary to the headlines the US economy continues to grow at a rapid clip. Without changes to interest rates and corporate balance sheets, it seems difficult to understand how this growth will unwind. Surely it might slow due to concerns in Europe, but it seems unlikely that the economy will be derailed. Nice summary of the ISM Services Index from First Trust. The index remained at 55.4 for the 3rd consecutive month in May. Any number is the mid 50s is very bullish. The important note is that the Business Activity index hit 61.1 and is a more natural signs of the activity in the economy then the overall sentiment number. Employment finally hit above 50 for the first time since the recession began. When business activity is at 61 and employment can only barely creep above 50, corporate profits should be soaring. So should the stock market but thats a different story right now. Earnings will eventually lead the market higher. New Orders remained at a strong 57 signaling that the index ...

The March ISM NMI or Services index came in at a strong 55.4 easily beating expectations and the 53 reported for February. Some of the numbers that stick out were the business activity and orders both jumping to 60+ while at the same time employment and inventories both remained in contraction mode. In fact, even though more companies are increasing inventories, we've still got companies decreasing as well. Prices paid are getting hot at 62, but with employment still contracting at a lot of businesses inflation will be contained. "The NMI (Non-Manufacturing Index) registered 55.4 percent in March, 2.4 percentage points higher than the seasonally adjusted 53 percent registered in February, and indicating growth in the non-manufacturing sector. The Non-Manufacturing Business Activity Index increased 5.2 percentage points to 60 percent, reflecting growth for the fourth consecutive month. The New Orders Index increased 7.3 percentage points to 62.3 percent, and the Employment Ind...

ISM Non Manufacturing (Services) report came in at 53 today versus the 51 estimate and the 50.5 for January. In fact, most economists were likely expecting the number to dip below last month considering weak economic reports such as consumer confidence and intial jobless claims and the severe snow storms in the east. The business activity (54.8) and orders (55) suggest a V shaped recovery is indeed on the way while the employment index at 48.6 provides for great profits opportunities. This may not be good news for your neighbor that is unemployed, but it should help corporate profits and hence stock prices. After all, if your activity/orders increase but you have less people/costs your profits should soar. The report was issued today by Anthony Nieves, C.P.M., CFPM, chair of the Institute for Supply Management™ Non-Manufacturing Business Survey Committee; and senior vice president — supply management for Hilton Worldwide. "The NMI (Non-Manufacturing Index) registered 53 percent ...

Today the ISM Services index was reported at 50.5 which showed growth but it was disappointing with expectations at 51. Not exactly a meaningful miss, but one non the less which I think enforced some fears that the economy is stalling. Ok, it went from contracting to growing in January so that doesn't really jive. Good analysis of the ISM report from First Trust . They feel strongly that the Business Activity indicator at 52.2 is a better indicator of the sector then the sentiment induced headline number of 50.5. Bespoke has a nice chart today averaging the 2 ISM indexes. Since Manufacturing as been very strong, it shows how the combined numbers tell a different story then what the market seems to think. A picture is always worth 1,000 words when it comes to economic data. The average ISM came in at 54.5 for January a number not seen since summer 2006. Its also worth noting that the 2004 recovery saw a number hit the 60s and that was after a mild recession where the numbers hardly...

While all eyes will be on the Jobs report on Friday, the Non-Manufacturing Index will likely show a return to growth after a dip in November according to Bloomberg . The Jobs report on the other hand is expected to come in around -1K which could easily hop over to the positive column. That would probably cause some excitement, but I think having the ISM service report hit over 50 (the estimate is 50.5) and possibly the highest for the recovery would be crucial to signaling this recovery is for real. Till December, the recovery has been all about the rebound in Manufacturing caused by the global recovery in places like Asia. Now if the service sector hits full stride we'll definitely start looking for that strong 4%+ economy. Something that's not in the market yet. Market Consensus Before Announcement The composite index from the ISM non-manufacturing survey weakened in November, declining nearly 2 points to a sub-50 and sub-par 48.7. This composite had been marginally positive ...

ISM reported this morning a very disappointing number for their November Non Manufacturing Index (NMI) or sevices. The index came in at 48.7 with expectations around 51.5. This number was much weaker then expected and doesn't really jive with other economic reports that have been very bullish such as Initial Jobless Claims that came in much better then expected. Being that the NMI number is very much correlated to sentiment then hard facts, it's possible that emotions were heavily influential in this report. All of the different categories were weaker though New Orders remained relatively strong at 55. The really confounding numbers are that Production was slightly negative at sub 50 and New Orders were up at 55, but somehow Backlog dropped to 48.5. "The NMI (Non-Manufacturing Index) registered 48.7 percent in November, 1.9 percentage points lower than the 50.6 percent registered in October, indicating contraction in the non-manufacturing sector after two consecutive mont...

After nearly 1 year of shrinking, the ISM Service Index finally shows signs of growing in September. The index reported at 50.9 for September beating estimates of a 50.0 report and 48.4 in August. For a market that has been weak due to supposedly concerning economic reports, this report is a reminder that the economy and recovery is clearly still in an uptrend. Too much emphasis has been placed on whether such and such report beat estimates and not enough on the trend. Just look at the monthly trend in the table at the bottom. The July report was slightly below the June report giving fears of a top in the recovery. Yet 2 months later and the report is much higher. If a similar pattern were too happen in Q4 then October would be around the mid 49s followed by say 52 and 54 reports. Would you sell stocks on the 'weak' October report or buy more knowing its still going higher? This months report saw substantial growth in Business Activities, New Orders, and Backlog. Consistently ...