Yes, the Empire Manufacturing Index looks at just a sliver of the goods-producing sector in the US, but the increase from –0.6 in July to 12.1 in August signals that the battered group is expanding again. Economists per Bloomberg had forecast a reading of 5.0.
The index stands at the highest since November 2007 and is well above zero, which is the line between expansion and contraction.
Moreover, the future general business conditions index advanced 14 points to 48.2.
Stocks, however, ignored the upbeat number and took a tumble as selling inspired from Friday’s lackluster consumer sentiment survey carried over to the new week.
Sentiment in the market can change quickly as we saw in late June and early July. But the mood quickly turned positive as 2Q earnings season blew out much of the gloom that had been hanging over the market.
Conditions, however, were ripe for a correction, and in my view, that is what we are seeing right now.
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