The market softened and began to swoon after the release of the PMI Manufacturing and Construction Spending reports, yet both buttress the argument of strong economic growth in the private sector.
The Manufacturing read of 57.2 is in-line with consensus and down slightly from February. You don’t have to be a chartist to see there has been an amazing surge in manufacturing (see below). The highlights of the report were employment and export orders:
The bottom line is growth is still in place and naturally slowed after a heck of a six month ride. Nonetheless, 17 of the 18 manufacturing industries reported growth and none experienced contractions.
Construction spending came in better than expected, but I like to focus on private sector spending, which climbed for the five consecutive month.
The market isn’t taking disappointing auto sales well, and I continue to worry about negative influence out of Washington, D.C.
Bottom line is the data on building and manufacturing are impressive and argue for solid growth in those areas this year, but the street is concerned about the drama of now, and that can’t be answered with soft or hard data.
I’d like to see the Dow Jones Industrial Average hold above 20,500 on a closing basis. It wouldn’t be the end of the world if that didn’t happen, but it would be impressive to see the index hold.
|The DJ did hold the 20.5 mark and looks to move into positive territory. The VIX spike has settled down as well and may go negative before the close. Both of these bode well for the market tomorrow.|
Philip M on 4/3/2017 3:43:22 PM
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