Plummeting Manufacturing and Exports Set Post-Recession Records
October 2, 2019 | FIRESIDE CHARTS
The ISM Manufacturing fell to a decade low yesterday and market reaction was swift: all 11 sectors of the S&P closed out the day in the red, with Industrials leading the way with a 2.4% drop. September marks both the largest single-month drop in U.S. manufacturing since the ’07 financial crisis and the fifth straight month that global manufacturing has contracted. While President Trump again lay the blame at the feet of Jerome Powell and the Federal Reserve, economists cite trade war uncertainty as the driving force of the slowdown. In fact, the WTO lowered it’s 2019 growth forecast for global trade yesterday by more than half, from April’s projection of 2.6% to 1.2% (another decade-low). Somewhat unsurprising perhaps, given that U.S. Manufacturing Exports declined at their fastest pace since the recession last month. Check out today’s charts for a more detailed look at the manufacturing data and the market as a whole!
1. Welcome to October! Here is how the month has played out in the past:
Source: The Chart Store, as of 9/27/19
2. Bubble, bubble, toil and trouble?
Source: SPDR, as of 9/23/19
3. U.S. Manufacturing activity missed badly in September and is now firmly in contraction mode (less than 50). It is the trend that really causes concern…
Source: WSJ Daily Shot, as of 10/2/19
4. The Chicago Fed’s report also missed badly and is once again in contraction mode.
Source: Natixis, as of 10/1/19
5. While the Dallas Fed just barely stayed positive…
Source: WSJ Daily Shot, as of 10/1/19
6. The trend of both the manufacturing PMIs and the Fed surveys has our attention…
Source: WSJ Daily Shot, as of 10/1/19
7. The U.S. consumer is ~70% of our economy. What happens when those consumers lose their jobs?
Source: WSJ Daily Shot, as of 10/2/19
8. Europe’s manufacturing continues to deteriorate…
Source: IHS Markit, as of 10/1/19
9. While Canada bucked the global trend and had its manufacturing PMI turn positive, Mexico joined over a dozen countries entering into a manufacturing contraction.
Source: IHS Markit, as of 9/2/19
10. This is all related to the trade war; U.S. exports fell at a similar rate to the great recession!
Source: WSJ Daily Shot, as of 10/2/19
11. Could this be due to tanker seizures by Iran & U.K and other State sponsored actions?
Source: WSJ Daily Shot, as of 10/2/19
12. Could this be a driver of the slow-growth economy? What do families spend the most on? Children!
Source: FRED, as of 10/2/19
Disclosure: The charts and info-graphics contained in this blog are typically based on data obtained from 3rd parties and are believed to be accurate. The commentary included is the opinion of the author and subject to change at any time. Any reference to specific securities or investments are for illustrative purposes only and are not intended as investment advice nor are they a recommendation to take any action. Individual securities mentioned may be helf in client accounts.