In November of 2015, I reported that U.S. Manufacturing was at Recession Levels, but the news has gotten worse. The Manufacturing sector is now shrinking.
US Manufacturing
In a recent CNN Money article, Patrick Gillespie reported several important statistics about the manufacturing sector:
"The U.S. manufacturing sector shrank in November for the first time in three years, according to the Institute for Supply Management (ISM). The ISM index hit 48.6% last month -- anything below 50% means the sector contracted. The November reading is the lowest it's been since 2009.
The ISM index has declined for five straight months now.
Only five of the 18 manufacturing sectors in the U.S. actually grew.
It's a grim confirmation that the headwinds of the global economic slowdown are hurting factories and plants across the country."
On a related note, I also wanted to mention the Chicago PMI report that came out this morning. In her MarketWatch column, Andrea Riquier reports:
"The index fell to 42.9 from 48.7 in November. Economists had expected it to rise 1.3 points to 50 in the December reading. The index has spent much of the year below the 50 mark that separates expansion from contraction.
Order backlogs were the biggest drag in December, dropping 17.2 points to 29.4. That’s the lowest since May 2009 and marked the 11th-straight month in contraction. The last time such a sharp decline was registered was 1951."
While the Chicago PMI index value of 42.9 is only the latest monthly value for a regional growth statistic, it was a stunningly bad number and the Chicago PMI had already been below 50 for most of 2015.
Conclusion
US Manufacturing was slowing at a rate not seen since the 2001 and 2008 recessions and is now shrinking.Given the continued strength of the US Dollar, the picture is not going to get brighter for the US manufacturing sector any time soon.
Print and Kindle Versions of Brian Johnson's 2nd Book are Available on Amazon (75% 5-Star Reviews)
Exploiting Earnings Volatility: An Innovative New Approach to Evaluating, Optimizing, and Trading Option Strategies to Profit from Earnings Announcements.
Print and Kindle Versions of Brian Johnson's 1st Book are Available on Amazon (79% 5-Star Reviews)
Option Strategy Risk / Return Ratios: A Revolutionary New Approach to Optimizing, Adjusting, and Trading Any Option Income Strategy
Trader Edge Strategy E-Subscription Now Available: 20% ROR
The Trader Edge Asset Allocation Rotational (AAR) Strategy is a conservative, long-only, asset allocation strategy that rotates monthly among five large asset classes. The AAR strategy has generated annual returns of approximately 20% over the combined back and forward test period. Please use the above link to learn more about the AAR strategy.
Brian Johnson
Copyright 2015 - Trading Insights, LLC - All Rights Reserved.
About Brian Johnson
I have been an investment professional for over 30 years. I worked as a fixed income portfolio manager, personally managing over $13 billion in assets for institutional clients. I was also the President of a financial consulting and software development firm, developing artificial intelligence based forecasting and risk management systems for institutional investment managers.
I am now a full-time proprietary trader in options, futures, stocks, and ETFs using both algorithmic and discretionary trading strategies.
In addition to my professional investment experience, I designed and taught courses in financial derivatives for both MBA and undergraduate business programs on a part-time basis for a number of years. I have also written four books on options and derivative strategies.
U.S. Manufacturing Sector Now Shrinking
In November of 2015, I reported that U.S. Manufacturing was at Recession Levels, but the news has gotten worse. The Manufacturing sector is now shrinking.
US Manufacturing
In a recent CNN Money article, Patrick Gillespie reported several important statistics about the manufacturing sector:
On a related note, I also wanted to mention the Chicago PMI report that came out this morning. In her MarketWatch column, Andrea Riquier reports:
While the Chicago PMI index value of 42.9 is only the latest monthly value for a regional growth statistic, it was a stunningly bad number and the Chicago PMI had already been below 50 for most of 2015.
Conclusion
US Manufacturing was slowing at a rate not seen since the 2001 and 2008 recessions and is now shrinking.Given the continued strength of the US Dollar, the picture is not going to get brighter for the US manufacturing sector any time soon.
Print and Kindle Versions of Brian Johnson's 2nd Book are Available on Amazon (75% 5-Star Reviews)
Exploiting Earnings Volatility: An Innovative New Approach to Evaluating, Optimizing, and Trading Option Strategies to Profit from Earnings Announcements.
Print and Kindle Versions of Brian Johnson's 1st Book are Available on Amazon (79% 5-Star Reviews)
Option Strategy Risk / Return Ratios: A Revolutionary New Approach to Optimizing, Adjusting, and Trading Any Option Income Strategy
Trader Edge Strategy E-Subscription Now Available: 20% ROR
The Trader Edge Asset Allocation Rotational (AAR) Strategy is a conservative, long-only, asset allocation strategy that rotates monthly among five large asset classes. The AAR strategy has generated annual returns of approximately 20% over the combined back and forward test period. Please use the above link to learn more about the AAR strategy.
Brian Johnson
Copyright 2015 - Trading Insights, LLC - All Rights Reserved.
About Brian Johnson
I have been an investment professional for over 30 years. I worked as a fixed income portfolio manager, personally managing over $13 billion in assets for institutional clients. I was also the President of a financial consulting and software development firm, developing artificial intelligence based forecasting and risk management systems for institutional investment managers. I am now a full-time proprietary trader in options, futures, stocks, and ETFs using both algorithmic and discretionary trading strategies. In addition to my professional investment experience, I designed and taught courses in financial derivatives for both MBA and undergraduate business programs on a part-time basis for a number of years. I have also written four books on options and derivative strategies.