Sunday, February 6, 2011

For the bulls - strong manufacturing data is reported

Many equity markets rebounded this past week, as a strong report from the Institute for Supply Management (ISM) reported that the US manufacturing sector grew at a faster rate in January with the Purchasing Managers Index (PMI) registered 60.8% - its highest level since May 2004. When the index is 50 or greater, the manufacturing sector is in a period of growth/expansion. These results were the sixth consecutive month of month-over-month growth in the sector.

MY TAKE: With continued strong new orders and production growth, it is likely that employment trends in the sector are improving as well. This growth, coupled with the effects from the second round of quantitative easing (QE2) are likely driving commodity prices, such as energy, metals and chemicals higher - increasing inflation concerns in various global regions.

No comments:

Post a Comment