Throw the US on the Heap

US ISM Manufacturing released at 10:00 this morning did not get a favorable reaction as you can probably see already...

Here's why...

ISM Mfg Index

Released On 9/4/2012 10:00:00 AM For Aug, 2012 Prior Consensus Consensus Range Actual ISM Mfg Index - Level 49.8  50.0  49.5  to 50.5  49.6  ISM missed consensus New Orders contracted for the 3rd month in a row at 47.1 in August (below 50 is contraction), this is the deepest contraction since April of 2009. New Export Orders also saw their 3rd month of contraction in August at 47.0. The lack of New Orders is now hitting production which fell 4.1 points to a contractionary level of 47.2 (the pain is being felt).  To put this production downswing in to context, this is the FIRST sub-50 print since May of 2009, this has caused the first build in inventories since September 2011 as producers didn't expect New Orders to fall off this hard. Further bad news showed Import orders are down and delivery times are shorter-both bad news and to add insult to injury, costs are up from 39.5 to 54 (assumed to be Energy). One plus is continued gains for employment which however are the slowest in 3 years and won't last if orders don't pop up soon. One beneficiary of the weak macro-data was of course, Gold where bad news is good news, but even this was a minor and thus far short lived move.  Gold acting as a QE sentiment indicator would be expected to move up, in fact a lot stronger than this as the report was released as bad macro-economic data is "supposed" to force the F_E_D's hand in unleashing QE3, which gold would be one of the main beneficiaries. However... It appears the move up was sold in to, my best guess is the disappointment with the Bernie/Jackson Hole speech that did not unleash QE3 as many have hoped for all year. So the US joins China and Europe in very ugly manufacturing data today. Consensus for today's ISM was 50! This is the 3rd contractionary reading below 50 in a row and the 4th miss to consensus in a row. According to data released yesterday and today, we now have approximately 80% of the entire world's countries in manufacturing contraction-I'd like to see what the BDI looks like today. Oh and as for a housing bottom, Construction spending, expected to come in unchanged at +.4 came in at -.9.