In Between Days

by CC September 1, 2011 9:59 pm • Commentary


The S&P 500 popped at 10AM with a knee-jerk reaction to today’s ISM Index, but the enthusiasm faded and the index closed the day down 1.19%. Some of the selling was in anticipation of tomorrow’s critical August jobs report in advance of a 3-day weekend. The index is in the red year-to-date at -4.23%, which is 11.67% below the interim high set on April 29.

From an intermediate perspective, the index is 78.0% above the March 2009 closing low and 23.0% below the nominal all-time high of October 2007.


The August global manufacturing PMI index fell to 50.1 from 50.6 in July, the lowest level since June 2009. The deterioration also marks the sixth consecutive month of decline and the longest losing streak since 2008. The index is now lower than both the survey’s long-run average (51.9) and the levels reported during the start of the last global recession (e.g., 50.8 in H1 2008). Moreover, the forward-looking new orders component fell further below 50, pointing to poor momentum in the global manufacturing sector in the near term.

The slowdown is broadly observed across major economies, especially in Western Europe.  In the US, ISM Manufacturing declined less than expected to 50.6 from 50.9, falling to the lowest level since July 2009. But details were of concern, with higher inventories keeping the headline index above water. New orders remained in the sub-50 territory for the second consecutive month.  The deterioration in euro area PMI reports is marked in both core and peripheral euro area economies.  The August euro area PMI fell to 49.0, the first below 50 reading since September 2009.

Of note, the German PMI is now at only 50.9, while the France PMI fell below 50. In addition, the Italian PMI dips again below 50 in August. Both the Spanish and Greek PMIs declined in August and remained at the subdued levels of 45.3 and 43.3, respectively. The weak PMI surveys raise doubts on the credibility of current fiscal consolidation programs and increase the pressure on further fiscal retrenchment, especially for the periphery. The UK manufacturing PMI was also weak in August and remained below 50 for a second month in a row.

In Japan, the August manufacturing PMI declined slightly to 51.9, while the three-month moving average continued to improve, indicating that manufacturing activity continues its moderate normalization back towards pre-earthquake level.


Starz Entertainment will pull all of its movies and television shows from Netflix Inc’s streaming service early next year, depriving Netflix customers from online viewing of new releases out of two major Hollywood studios.

Pay-TV operator Starz, controlled by John Malone’s Liberty Media, said on Thursday it had ended talks to renew a deal that expires February 28. After that date, Starz will stop providing its content, which includes exclusive rights to first-run Sony Corp and Walt Disney Co movies, for streaming on Netflix.

Shares of Netflix were down 8.7 percent at $213 in after-hours trade, from a close on the Nasdaq of $233.27.

Tomorrow’s Tape: Big Old Bucket of Jobs Report


  • 8:30 a.m. ET: A little something called the jobs report, for August. A vale of tears or a font of delicious hope. Probably neither, more like a big old KFC bucket of confusion.