Recession NEAR! Market stumbles on worse than expected Manufacturing Report
DriftingByTheStorm
Posts: 8,684
Stocks and futures took a good beating this morning.
10am saw the release of the monthly Institute for Supply Management Manufacturing Index numbers.
Run down:
Numbers on a 50pt median scale,
with any number over 50 being growth in the manufacturing sector.
Any number below 50 indicates "contraction" of manufacturing (but the economy in general MAY still be growing) ....
Any number BELOW 43 INDICATES RECESSION.
The number has been waning steadily from 55 in the summer ... down to 51 & change for November.
Numbers release on a month lag, so today was the release for December numbers.
Pre-announcement ISM "concensus" was stated to be "slight decline" at 50.9 ...
THE ACTUAL NUMBER BOMBED OUT (announced 10am today) AT 47.7!
Negative on the GOOD SCALE.
:(
Thats 5ish points over recession.
Look for that to remain unchanged or decline further next month for january.
BONUS ANNOUNCENT: GOLD at 28 YEAR RECORD HIGH AT $850+ TODAY (not inflation adjusted record, of course)
[the intraday chart spiked out at 875 at one point early this AM!]
10am saw the release of the monthly Institute for Supply Management Manufacturing Index numbers.
Run down:
Numbers on a 50pt median scale,
with any number over 50 being growth in the manufacturing sector.
Any number below 50 indicates "contraction" of manufacturing (but the economy in general MAY still be growing) ....
Any number BELOW 43 INDICATES RECESSION.
The number has been waning steadily from 55 in the summer ... down to 51 & change for November.
Numbers release on a month lag, so today was the release for December numbers.
Pre-announcement ISM "concensus" was stated to be "slight decline" at 50.9 ...
THE ACTUAL NUMBER BOMBED OUT (announced 10am today) AT 47.7!
Negative on the GOOD SCALE.
:(
Thats 5ish points over recession.
Look for that to remain unchanged or decline further next month for january.
BONUS ANNOUNCENT: GOLD at 28 YEAR RECORD HIGH AT $850+ TODAY (not inflation adjusted record, of course)
[the intraday chart spiked out at 875 at one point early this AM!]
If I was to smile and I held out my hand
If I opened it now would you not understand?
If I opened it now would you not understand?
Post edited by Unknown User on
0
Comments
how about some good news.
WASHINGTON - Construction spending edged up slightly in November as a continued steep slump in housing was offset by record spending on government and business projects.
The Commerce Department reported that spending on construction projects rose by 0.1 percent in November to a seasonally adjusted annual rate of $1.165 trillion, a better performance than what economists expected. Spending had fallen by 0.4 percent in October.
http://news.yahoo.com/s/ap/20080102/ap_on_bi_go_ec_fi/economy
Uh.
Even the analysts on CNBC dismissed government spending numbers as "not necessarily a good thing" in the context of this package of numbers.
I'm not saying i don't hear you, i'm just saying it's somewhat foolish to still consider this a "correction".
A correction is a market driven general reaction. It is not a bank "failure" related, credit crunch forced retraction.
What we are seeing is not what i would call a "correction" ... it is a situation caused by a very real problem (primarily in housing) that will continue to drive the markets down as more reports come out (new homes sales were down 10% per last weeks report!) that demonstrate how the consumer (the ULTIMATE driver in the american 75%+ of GDP is really consumer spending on economy) is inable to prop of the broader economy.
If people are mortgaged to the hilt, and unable to move out of their house, and are having to max out their credit cards, spending will continue to decline. With that, manufacturing will continue to decline. As home sales continue to lag, prices on homes will continue to fall. With that, foreclosures will continue to rise. With that, consume spending will continue to fall, repeat cycle for rest of 2008.
:(
BTW, the market is being proped up at the 100 point loss by PURE TECHNICAL support. The market broke on that mnf. news down straight to chart related "S1" levels ... meaning that based on previous business day high\low\close numbers, the estimated range for the day had been reached on the down side. For the last 40 minutes it has hovered on that S1 level within just a few points. It is currently BREAKING that support as i type. But we are entering lunch. We will know more around 1:30. :eek:
If I opened it now would you not understand?
good news is people still need somewhere to live. people still have jobs. inflation is low. I agree 08 will be a tough year, maybe even recessionary, but it will still be productive for most.
But they haven't found a bottom.
Bad.
So good for speculators who want to rent, but don't have the collateral to get an 80/20 to buy that investment property to rent? I dunno. I think existing home inventories will continue to rise, although you do get one brownie point -- existing home sales did NOT drop 10% with new home numbers last week. they remained flat, which was unexpected. We will know more next month about the truth there.
Job growth numbers are slowing. Unemployment numbers are rising. :(
No it isn't. Even CNBC analysts repeatedly are saying that the stated numbers are "cooked", "half truths", that "hide real inflation" which is stated as floating past 4% and probably 5%-7% for the past year. By historical norms (2%) that is very high. :eek:
Uh huh.
Still be productive for most TRADERS.
Look for the long-only market, read -- all mutuals and all market averages, to remain depressed. Most analysts calling for 3% market growth. Not exactly what you'd call desireable.
Now if we are talking about daily volatility? Hell yeah, traders are getting rich!
OH,
and WE DIDN'T EVEN TALK ABOUT OIL!
WATCH OUT!
One of the few suppliers capable of substantial supply increase right now is RUSSIA! Unless you think we are going to get some help from Venezuela ???
Look for oil to break 100 and NEVER LOOK BACK.
:(
BAD BAD NEWS for the consumer.
Add that to my equation from the last post.
If I opened it now would you not understand?
...
Well, other than F-22s and AIM-9s... and Meth.
Hail, Hail!!!
UPDATE:
did NOT need to wait past lunch.
SHE BROKE. AND BROKE HARD!
While i was typing the response above this, she broke S1 and went straight and fast to S2.
That was a move equivilant of the move on news this morning.
For a near doubling of the original loss.
(ok, for the Dow it is only a 50% extension of the loss. For futures it is 100% additional loss)
BONUS NEWS: SPOT GOLD at RECORD HIGH of 858!
If I opened it now would you not understand?
and unemployment has been relatively unchanged for almost 2 years.
http://www.economagic.com/em-cgi/data.exe/feddal/ru
1. Aircraft
2. Motor vehicles for transporting people
3. Electronic integrated circuits
4. Motor vehicle parts
5. Low value shipments
6. Regional jet parts
7. Oil, not crude
8. Computers
9. Aircraft parts
10. Electric equipment for line telephony
11. Medical instruments for surgeons, dentists, vets
12. Medicine
13. Machinery parts
14. Computer parts
15. Motor vehicles for transporting goods
http://www.worldcityweb.com/home/USA/statistics/view/207/
Its just debate, Jlew. With me, you should be used to that by now.
Don't know who "we" is. But times will be tough for some and they will be fine. For others times will be tough, and that will be it -- just really tough. The people who are in foreclosure i don't think will agree with your "fine" sentiment. Nore all the affluent in places like northern Virginia who bought houses in 2001-2003 and are seeing their houses market value dip below levels that support the equity they have in those houses -- ie ... they are STUCK. Among other "not fine" sentiments.
I am growing to HATE that term.
It is a reality check, not "fear mongering".
Stop painting roses on tombstones.
Really?
Google "Unemployment Rises 2007" and see if that is REALLY true.
?
If I opened it now would you not understand?
google is fun isnt it. the numbers are still under 5% nationally no matter how you draw it up.
Corn, Wheat, Scrap Iron are not really manufactured, right? I mean, it's not like we used to be, where a kid with only a high school diploma could carve out a pretty descent living making water heaters, washing machines, refridgerators, automobiles, car parts, televisions, stereos, electric drills, etc...
Now days... a kid needs a college degree to get an entry level job at a corporation... and college is fricken' expensive... and companies don't have all the perks they used to. It's tougher, not easier for the kids (and their parents... imagine if you've got to send 2 or 3 kids to college). There are more service jobs... like Target or Wal-mart or Taco Bell... but fewer jobs at Boeing or Lockheed or RCA or Westinghouse.
Hail, Hail!!!
our top exports
1. Aircraft
2. Motor vehicles for transporting people
3. Electronic integrated circuits
4. Motor vehicle parts
5. Low value shipments
6. Regional jet parts
7. Oil, not crude
8. Computers
9. Aircraft parts
10. Electric equipment for line telephony
11. Medical instruments for surgeons, dentists, vets
12. Medicine
13. Machinery parts
14. Computer parts
15. Motor vehicles for transporting goods
you're right. we arent in the 1950s anymore. a sound education is needed to succeed. and they are not fewer jobs at boeing, lockheed, RCA, or westinghouse. you just need to be educated to work there.
I'm bearish for the next year. Don't underestimate the loss of blue collar manufacturing jobs, that is the middle class.
S&P futures broke S2 headed for S3.
YIKES
:(
If I opened it now would you not understand?
Trust me... there are fewer jobs here. And we won't even look at a resume that does not have a college degree and 3 years of experience for entry level positions, today.
The C-17 is the last big aircraft being manufactured in California. There used to be Boeing, McDonnell-Douglas, Rockwell, Hughes Aircraft, Northrop, Lockheed, General Dynamics, Grumann, Martin-Murietta, Vought, Westinghouse, Ford, General Motors and Chrysler manufacturing plants in Southern California... throughout the 1980s. By the 1990s, the Aerospace companies merged to form basically 3 companies and the cars all moved to Canada or Mexico. All of those well paying manufacturing jobs are gone. And when companies merge... do you think they keep all of the H.R. people on the payroll? All of the mangement? Cutting costs means cutting jobs (or shipping them to places where they can pay pennies on the dollar and not have to worry about pesky labor laws).
China is sub-contracted to manufacture barrel sections, landing gear, seats, lavatories and all kinds of sub-assemblies. India has most of the the support functions. and have you been to Fry's lately? How many computer parts do you see that are stamped 'Made in America'? Or, hell... go to Pep Boys and find the parts that don't say 'Hecho En Mexico' on them.
But, on the bright side... there are more malls and Wal-Mart has moved into town and there are more than enough Taco Bells and Starbucks around.
Don't kid yourself... manufacturing has gone and it ain't coming back. There are more and more lower class service jobs and fewer and fewer well paying Middle Class jobs. College is a must. And college ain't cheap.
Hail, Hail!!!
you might find this interesting.
http://www.ofii.org/insourcing/
http://ezinearticles.com/?Insourcing:-Millions-of-High-Paying-Jobs-Replace-Those-That-Cannot-Be-Saved&id=491536