September Manufacturing Data in Focus
We start a new trading day quietly, albeit at record-high levels on the blue-chip Dow and S&P 500 indexes. We’re lower at this hour, but unconvincingly so: the Dow is -121 points, -0.28%, the S&P -0.11%, the Nasdaq -0.02% and the small-cap Russell 2000 is at -0.15%. But we may expect a turnaround based on favorable data after the opening bell (should it actually be favorable).
September Manufacturing Data On Deck
Both ISM Manufacturing and final S&P Manufacturing PMI reports are out a little later this morning, with expectations for both holding relatively steady. ISM Manufacturing is estimated to have grown by 30 basis points (bps) to 47.5%, with S&P PMI anticipated to come in even with the prior month at 47.0%.
That said, both these figures are expected to remain in contraction (sub-50), and only incrementally moving in the right direction. In fact, we’ve basically been within a band between 45 and 51 on ISM, while S&P PMI is now pushing the bottom of its two-year band.
Ultimately, we expect manufacturing to pick up pace as microchip foundries and other businesses crop up in select regions of the U.S., but it takes time to get there. Manufacturing can’t wait forever to get there, either, or they may be waiting forever. Before a potential economic recession in the next year or two (not guaranteed, but not to be discounted) strafes resources that could be put to growth industries as under the Chips Act, it obviously looks to do so.
JOLTS for August After the Opening Bell
TheJob Openings and Labor Turnover Survey (JOLTS) for August posts later this morning, with 7.7 million job openings expected — in-line with the previous month. The number of unemployed persons per job opening was +0.9 a month ago, the highest level in more than three years. This is another piece of evidence of an unraveling labor market, although not (yet) rapidly so.
JOLTS data is obviously reported a month in arrears, so it’s a bit of a reflection in a rear-view mirror. The number of job quits is way down from where it was during the Great Reopening a few years ago, but we’ll look to see if there is any movement back up. Last time around, Total Job Separations was at an historically low +3.4%, just below the +3.5% in latest Hires Rate. Again, we look for movement in these numbers more than the current levels, which are fine.
Construction Spending Looks to Improve
Also after today’s open, Construction Spending numbers for August come out. This is expected to bring a headline 0.0%, which is at least better than the -0.3% posted the prior month. Construction spending is up huge from where it began the 21st century, with federal government works projects helping spur a Construction market in need of a boost. We’ll see where it goes from here, but currently looks to be plateauing.
Nike Reports Q1 Earnings After Market Close
Fiscal Q1 numbers for Nike NKE are out after today’s closing bell. The Zacks Rank #3 (Hold)-rated global shoe and apparel retailer expect a big drop on earnings ($0.51 per share versus $0.94 a year ago) and revenues (expected $11.65 billion, -9.96%), but is currently riding a string of four-straight quarterly earnings beats, with a trailing four-quarter average of +27.6%.
So not only does Nike usually beat — it only has two misses in the past five years — but it usually does substantially. Currently shares are under water year-to-date, -17%, but a set of impressive numbers today, including forward guidance, could provide a good entry point for interested investors.
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