April ISM Manufacturing

ISM Manufacturing missed expectations at 50.8 vs. 51.5 survey.  Given the inverse correlation between the composite index and dollar valuation (weaker dollar would spur demand for U.S. goods), the latest miss was somewhat surprising.  Nevertheless, weaker dollar and stronger oil likely contributed to a sharp rise in the price index (as well as higher raw material cost), which came in at 59.0 vs. 51.5 prior; the improvement in New Export Orders was smaller than expected at 52.5 vs. 52.0 prior.  Employment rose to 49.2 vs. 48.1 prior – a sign of easing contraction in the sector.

The ISM PMI officially kicked off the monthly “high-stake” data week which ends with the payrolls report, and investors will focus on tomorrow’s vehicle sales and Fed speeches, as well as Wednesday’s ISM NMI to assess services sector employment situations.

Major sub-indices (versus Federal Reserve’s Trade Weighted Broad Dollar Index):

• ISM manufacturing PMI at 50.8 vs. 51.5 survey and 51.8 prior
• New orders at 55.8 vs. 58.3 prior
• New export orders at 52.5 vs. 52.0 prior
• Prices at 59.0 vs. 51.5 prior
• Employment at 49.2 vs. 48.1 prior