Factory Orders and Employment Reports Continue to Drag Down The Market
Dec 1st, 2008 | By Christian Hill | Category: Financial NewsNow that the turkey-induced coma has worn off, it’s time for the market to get back to work. Heading into the final month of the year, we could hope for an early Christmas present and a strong rally, but that will be a tall order.
There are plenty of reports this week, but not one that could be considered ‘encouraging’. Both ISM reports this week are expected to show further contraction. The ISM Index is anticipated to show a slight decline down to a reading of 38, while the ISM Service report will likely show a very slight decline to 42.6. Both of these reports need to show a reading above 50 to indicate expansion, so they have a long way to go to reach that threshold.
The Factory Orders report for October is anticipated to show a nearly three percent slowdown, and I wouldn’t be surprised to see this report be worse than expected. Last Wednesday the Durable Goods report showed the biggest drop since October 2006, and I think that this will also carry over to Factory Orders. A slowdown of over three percent won’t be shocking, and could push four to five percent.
The employment reports continue to be the darkest cloud over the market. The Non-Farm Payrolls report for November is announced Friday, and it looks like the economy will shed another 300,000 jobs. When this report is announced, I wouldn’t be blown away if they revise Octobers report to show a greater loss of jobs than initially thought. The rate of job loss is accelerating, not slowing. At this rate, the country will shed a staggering 1.75 million jobs this year.
Source: Factory Orders and Employment Reports Continue to Drag Down The Market
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