ISM Manufacturing
US markets are closed on Monday for Labor Day but will be back in action on Tuesday with some important economic data. The highlight is the August ISM Manufacturing Index at 10 a.m. ET.
In July, the survey results were disappointing, falling to 46.8 points compared to the expected 48.8 points. This month, economists expect a rebound to 47.5 points, but this is still in contraction territory and at the lowest range since 2023.
Some highlights from the July report:
- Employment 43.4 vs. 49.3 previously
- New orders 47.4 vs. 49.3 previously
- Stocks 44.5 vs. 45.4 previous
These numbers are of particular interest to Bank of America, which wrote: “The new orders-to-inventory ratio is the best three-month leading indicator for the ISM manufacturing PMI, and history suggests the ISM will reach 52 by October 2024 (the number will be released on November 1).”
We still have a few months to go, but if it does happen, they suggest the biggest bullish trades if the ISM rises will be in China, commodities, and Korean/emerging market equities.