Notes on PMI-Dallas F_E_D

I suspected from the start of the year all of the economic reports were being heavily massaged by arbitrary seasonal adjustments, they should just stick to 1 set of rules, instead (probably because of an election year), they grabbed whatever number they wanted and then fit the seasonal adjustment to justify it, although I can't rule out a larger Wall Street move up which they needed to unload as the breadth charts make clear they were doing the entire time.


Take a look at the Citigroup Surprise Economic Index this tells the story of what happens when seasonal adjustments are no longer there to mask the data.


As for the Chicago PMI (and consider the market action thus far this morning and what I said last night about "once Wall Street starts a cycle, they are pretty darned sure to finish it no matter what is thrown in their way', for instance the data out of Europe this morning and the US, in any naturally discounting market, we'd be off -2% right now.


The headline number and the size of the miss were both the worst showing since 2009! 


The Dallas F_E_D Manufacturing Index missed as well, this is the first negative print in the index for the year, it is also the biggest drop in seven months and the worst miss in 10 months. The drop from +10.8 to -3.4 is also the largest sequential drop in 11 months. 


The US is not dislocating from the world economy as many economists have been arguing, it is lagging the world economy and likely because of the massaging of the numbers in an election year.

However, don't discount the QE crowd just yet, they will turn any negative print in to a market positive on the hoped of more QE, which is something we will discuss in further detail later.

For now though, the trend in the macro economic data is clear, it seems it's not only price that is deceptive, but the Macro data in general that pushed the market higher this year on seasonal adjustments that no one could justify. All you had to do was look beyond the headline number at the sub-indicies in the reports to see they were bunk, or watch credit markets or market breadth.