ISM misses forecasts; Stocks look to recover from Fed slump

Summary:

• ISM manufacturing PMI: 51.2 vs 52.0 exp

• Employment component also drops ahead of NFP

• S&P500 at daily highs despite the data

Today’s seen the focus fall on manufacturing with PMI releases from around the globe released that have further served to support the notion of a slowdown in activity. The last, and arguably the most important, comes from the US with the ISM reading for July coming in at 51.2 down from 51.7 prior. The reading was below the expected 52.0. This now means that 3 of the past 4 releases for this data point have missed forecasts. 

Both the USD manufacturing and the more widely viewed ISM reading have extended their declines of late and are in danger of slipping below the 50 mark in the coming months. Source: XTB Macrobond 

The sub components of the report were also pretty soft, with employment dropping to 51.7 from 54.7 prior. Prices paid also declined to 45.1 from 47.9 and while new orders bucked the trend in rising to 50.8 from 50.0 the increase is minimal. The employment reading is of particular interest here given that tomorrow with see the release of the latest US jobs report. 

The S&P500 has recovered after the rout seen yesterday evening following the Fed. The market has now moved back above the 61.8% fib with the 78.6% at 3003. Source: xStation