Dow charged ahead 165 (near the highs), advancers over decliners almost 5-1 & NAZ gained 73. The MLP index rose 3+ to the 333s & the REIT index advanced 7+ to 330. Junk bond funds went up along with stocks & Treasuries pulled back. Oil & gold sold off.
AMJ (ALerian MLP Index tracking fund)
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US manufacturing activity slowed in Oct for a 4rth straight month, but a rise in new orders offered hope for a sector buffeted by a strong dollar & relentless spending cuts by energy companies. The Institute for Supply Management said its national manufacturing index slipped to 50.1 this month from a reading of 50.2 in Sep (a reading above 50 indicates expansion in the manufacturing sector). New orders rose to 52.9 from 50.1 in Sep. However, the employment index fell to 47.6, the lowest reading since Aug 2009, the first time it had dropped below 50 since Apr. Manufacturing, which accounts for 12% of the economy, has also been slammed by business efforts to reduce an inventory overhang & slowing demand overseas.
Business activity across the Midwest snapped back in Oct & rose to its best level since Jan after contracting last month. The Chicago Business Barometer, also known as the Chicago PMI, jumped to 56.2 from 48.7 in Sep. Economists expected only a modest uptick, to 49.0. Readings above 50 indicate expansion whereas prints below that level denote contraction. The Chicago PMI, which has been in negative territory 5 times this year, & unexpectedly dropped below 50 last month. Gains in production & new orders bounced back into positive territory & recovered Sep declines, pacing the way higher. The subindex measuring production surged 20 points to 63.4, while the new orders gauge increased 10 points to 59.4. Firms also reported significant growth in inventories, which accounted for part of the leap in output in Oct. Despite the solid improvement, there were some soft spots. The employment gauge snapped a string of increases & fell back to the 50 mark. Some firms pointed to continued difficulty in sourcing qualified workers. Employment tends to lag orders. Order backlogs, meanwhile, slipped a point to 45.5.
Richmond Federal Reserve pres Jeffrey Lacker said he favored raising interest rates at the Fed's policy meeting last week because steady growth in the economy has helped labor markets to tighten "considerably." Lacker, who dissented in the Fed's decision to keep rates steady, said that rates should be higher because of "the steady growth in output and household spending that we have been observing - and expect to continue."
The news was nothing special, but buyers came out in droves. Go figgah! China reported that its factory index was below 50 for 3 straight months (although it is not a major part of the economy). Congress sort of got its act together & will muddle by without the last minute budget fights during the next 2 years. But that received little mention today. Maybe the big news is that there will be no worry about higher interest rates until next month. Economic fundamentals remain unimpressive & Dow has fought its way back into the black for the year (just barely).
Dow Jones Industrials
AMJ (ALerian MLP Index tracking fund)
| CLZ15.NYM | ....Crude Oil Dec 15 | ....46.15 |  ...0.44 | (0.9%) |
US manufacturing activity slowed in Oct for a 4rth straight month, but a rise in new orders offered hope for a sector buffeted by a strong dollar & relentless spending cuts by energy companies. The Institute for Supply Management said its national manufacturing index slipped to 50.1 this month from a reading of 50.2 in Sep (a reading above 50 indicates expansion in the manufacturing sector). New orders rose to 52.9 from 50.1 in Sep. However, the employment index fell to 47.6, the lowest reading since Aug 2009, the first time it had dropped below 50 since Apr. Manufacturing, which accounts for 12% of the economy, has also been slammed by business efforts to reduce an inventory overhang & slowing demand overseas.
Factory Activity Hits Lowest Level Since 2013
Business activity across the Midwest snapped back in Oct & rose to its best level since Jan after contracting last month. The Chicago Business Barometer, also known as the Chicago PMI, jumped to 56.2 from 48.7 in Sep. Economists expected only a modest uptick, to 49.0. Readings above 50 indicate expansion whereas prints below that level denote contraction. The Chicago PMI, which has been in negative territory 5 times this year, & unexpectedly dropped below 50 last month. Gains in production & new orders bounced back into positive territory & recovered Sep declines, pacing the way higher. The subindex measuring production surged 20 points to 63.4, while the new orders gauge increased 10 points to 59.4. Firms also reported significant growth in inventories, which accounted for part of the leap in output in Oct. Despite the solid improvement, there were some soft spots. The employment gauge snapped a string of increases & fell back to the 50 mark. Some firms pointed to continued difficulty in sourcing qualified workers. Employment tends to lag orders. Order backlogs, meanwhile, slipped a point to 45.5.
Midwest Manufacturing Activity Jumps into Expansion
Richmond Federal Reserve pres Jeffrey Lacker said he favored raising interest rates at the Fed's policy meeting last week because steady growth in the economy has helped labor markets to tighten "considerably." Lacker, who dissented in the Fed's decision to keep rates steady, said that rates should be higher because of "the steady growth in output and household spending that we have been observing - and expect to continue."
Fed's Lacker Says Labor Market has Tightened
The news was nothing special, but buyers came out in droves. Go figgah! China reported that its factory index was below 50 for 3 straight months (although it is not a major part of the economy). Congress sort of got its act together & will muddle by without the last minute budget fights during the next 2 years. But that received little mention today. Maybe the big news is that there will be no worry about higher interest rates until next month. Economic fundamentals remain unimpressive & Dow has fought its way back into the black for the year (just barely).
Dow Jones Industrials
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