ISM misses but stocks break to record highs

Summary:

• ISM manufacturing PMI: 48.3 vs 48.9 exp

• Earlier solid NFP report 

• US500 back near record highs

The last top tier economic release of the week has been something of a disappointment with the most recent manufacturing data from the US missing forecasts. The ISM reading for October came in at 48.3 but while this is a beat on the 47.8 prior it was below the 48.9 expected. The employment index rose to 47.7 (46.3 prior) and new orders also increased to 49.1 (47.3 prior) but prices paid dropped sharply to 45.5 (49.7 prior).  

Earlier the October US jobs report was all round pleasing and solid with both the headline topping estimates and also a sizable upwards revision to the prior (read more here).

The first response from a Fed official to the data has come from Clarida who made the following remarks on Bloomberg TV:

• Risks still tilted to the downside somewhat

• Rate cuts will give significant support to the economy 

• Economy and monetary policy are in a good place

US indices dipped yesterday after some negative trade remarks but they remain on course for a very solid week of gains during which they have notched up new highs in recent trade for the S&P500 and Nasdaq but the Dow Jones Industrial Average remains shy of its record peak.

The US500 is making new all-time highs at the time of writing and probing the top of a rising trendline dating back to the start of 2018. Source: xStation