Non-Manufacturing ISM

In the past the non-manufacturing ISM didn't draw many eyeballs. However, with the ISM manufacturing index coming in <50.0 the last four months, bulls are looking for any signs of life that will give the economy a justified boost. 

I don't mean to belittle this report as the majority of business industries in the U.S. are not manufacturing. We are in fact a "service based economy" at this point. This report will be important as it gives a read through to employment and pricing in non-manufacturing based industries. This read through actually does have a wider and more important meaning for the labor markets. 

Some important things to remember: 

  • Growth in the non-manufacturing sector has been slowing since July
  • ISM manufacturing index has been <50 for four straight months
  • Investors are worried and will watch for any spillover from ISM manufacturing 
  • The dividing line between expansion and contraction is 50.0
  • Trends in this report can influence the markets thoughts about Fed's path toward "policy rate normalization"

This report impacts the following:

  • TLT
  • TBT
  • SHY
  • IEF
  • SPY
  • QQQ
  • DIA


ADP Employment numbers are also due out at 8:15 EST. Consensus numbers are somewhere around the 190k Jobs number. This would be lower than the prior number of 257K. On the low side a number greater than 180K jobs should keep things "okay" for the markets. 

Who the Fuck Said Anything About Oil? Bitch, You Cookin?

Oil will continue to dominate the trading screens as the $CL_F closed sub <30 for the first time since it bottomed and rallied from the mid 26 level. Crude inventories will be released at 10:30 a.m. EST. The prior number too look for/compare against is 8.383M barrels.