Afternoon Note
ISM
The Institute for Supply Management (ISM) Index fell to 59.8% in September from 61.3% in June. A reading over 50 indicates expansion.
A respondent from the furniture industry commented, “Business is strong and relatively stable. Tariffs are putting pressure on Chinese imports. Labor rates are increasing as it is very difficult to find help.”
New orders continue to show strength, evidenced by the 17th straight reading above 60. Overall, the report shows the economy continues to expand at a healthy pace. The decline in the Prices Paid Index is a welcome relief for manufacturers.
Construction Spending
Construction spending increased 0.2% in August from a revised 0.2% (from 0.1%) in July. Private construction spending fell 0.5% mainly due to a 0.7% decline in residential construction. Public construction spending rose 2.0% helped by an increase in educational construction (1.0%) and highway construction (1.7%). Year-over-year construction spending rose 5.3% with public construction increasing 14% and private construction 4.4%. Public construction has been outpacing private construction.
Auto parts manufacturers are trading higher. Under the original NAFTA agreement, at least 62% of the material in an automobile must be from North America. The new deal specifies the threshold be raised to 75%. Auto parts companies Lear (LEA) and Magna are higher by 2.7% and 4.5%, respectively.
Railroad operator Kansas City Southern (KSU) has direct exposure to the Mexico automobile market and is trading higher by 2.67%. Canadian Pacific Railway operates a transcontinental freight railway in Canada and the United States and is trading higher by over 2%.
General Electric (GE) announced it was replacing CEO, John Flannery, with a new CEO, Larry Culp. Culp was the CEO of Danaher (DHR) for fourteen years. The markets cheered the news as GE traded higher by as much as 15%.
Equities traded higher from the open but have given back some of those gains this afternoon. Industrials are outperforming due to the USMCA agreement.
Breadth:
Tweet |
3/28/2024 1:39 PM | Fruitful Quarter |
3/28/2024 9:50 AM | LISTEN TO THE MARKET |
3/27/2024 1:40 PM | Mostly Higher |
3/27/2024 9:32 AM | U-TURN? |
3/26/2024 1:08 PM | Everything Is Up |
3/26/2024 9:42 AM | TAPPED OUT (I HOPE YOU AT LEAST GOT A T-SHIRT) |
3/25/2024 1:33 PM | Not A Mutiny |
3/25/2024 9:35 AM | STAYING THE COURSE…BEYOND TECH |
3/22/2024 12:56 PM | Toll on Americans |
3/22/2024 9:38 AM | A TAD TIRED |
3/21/2024 1:55 PM | Building on Gains |
3/21/2024 9:30 AM | A COMFORTING FED |
3/20/2024 1:33 PM | Pivotal Moment |
3/20/2024 10:00 AM | HERE COMES THE FED |
3/19/2024 1:33 PM | Picking Up Steam |
3/19/2024 9:35 AM | RUMBLINGS IN THE BOND MARKET |
3/18/2024 1:48 PM | Mag 7 is Back |
3/18/2024 9:39 AM | THE PARTY IN SAN JOSE WILL BE LIT |
3/15/2024 1:38 PM | Realtors Settle |
3/15/2024 9:33 AM | AN UNEASY PAUSE |
3/14/2024 1:43 PM | Sticky Inflation |
3/14/2024 9:48 AM | GOING TO A GO-GO |
3/13/2024 2:16 PM | Taking a Breather |
3/13/2024 9:51 AM | ALL SO EPIC |
3/12/2024 1:42 PM | Marching Higher |
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