As everyone is waiting for Bernanke's magic words tomorrow from Jackson Hole, and given the upcoming 3-day weekend, we thought it is a good time to provide our guesstimate for the Aug. manufacturing ISM.
Our model generated an ISM of 50.1, a slight improvement from July's 49.8. We believe such a result will keep the Fed at bay as it does indicate some improvement, although it won't be something to write home about. We note that this figure is still significantly below the YTD high of 54.8 that we saw in April. It is also below last year's 52.5 and 2010's 57.4. Manufacturing ISM for August will be released on Tuesday, 9/4, at 10am ET.
The market could be begging Bernanke to make some pro-QE comments at Jackson Hole, as it has reacted negatively to initial jobless claims and personal income & spending economic data. Even with today's near 1% decline, and if those losses are not pared by the close, we think a QE is more than priced in. S&P 500 is down nearly 11 points, but VIX is up only around 3.5%.
We will provide our estimate of August nonfarm payrolls (NFP) this weekend.
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