Monday, June 2, 2014

Disappointing May ISM manufacturing ...

ISM manufacturing for May came in at 53.2, below our 55.8 estimate and the Street's 55.5.  Data show that growth slowed across most sub-indexes.  In our opinion, deceleration in new orders, production, employment, backlog, exports, and imports, accompanied by no change in inventories, continuing weakness in customer inventories, and overall prices surging higher, isn't a very good sign.  

Construction spending for April came in below expectations, but the miss was mostly due to an upward revision of the March data.  

Equity market's reaction to all of this has been pretty modest, with S&P500 down only 0.08%, as many await release of the May employment report this Friday.

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