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Below is a chart and brief excerpt from today’s Market Situation Report written by Tier 1 Alpha. If you’re interested in learning more about the Hedgeye-Tier 1 Alpha partnership, there’s more information here. |
Today at Tier 1, we highlight some particularly bleak regional survey data, even as our PV bands suggest a tactically bullish day. Welcome to trading markets in 2023 — it's always an adventure. For today, we suggest setting the macro aside and focusing on the flows. As for tomorrow? It might be a blend of both macro and flows, but we'll keep you updated.
Key Takeaways from the August Empire Manufacturing Report:
- August's Empire Manufacturing was -19, significantly underperforming the expected -1; it's the lowest point since May.
- New orders and shipments faced substantial decreases, recorded at -19.9 and -12.3, respectively.
- There's a noticeable dip in manufacturing activity within New York State.
- The general business conditions index sharply declined by twenty points to -19.0.
- Orders and shipments both experienced moderate reductions.
- Both unfilled orders and inventory indices stayed in the negative zone, registering at -6.8 and -9.7.
- The consistency in delivery times is reflected by its steady index of 1.9.
This report reveals a marked slump in New York State's manufacturing activity for August 2023, underscored by the significant downturn in new orders and shipments. On the brighter side, the firms exhibit a hopeful attitude toward the coming times. That’s the spirit; historically speaking, it can’t get a whole lot worse.
One now understands that the ongoing drag in new orders is becoming a big part of the Chinese economic narrative. It’s no secret the U.S. has outsourced manufacturing capacity to China for decades. With youth unemployment in China (16-24 years olds) moving up to 21.3%, the PBOC has stopped publishing the data. China is grappling with upside-down demographics, but at the moment, they are having difficulty employing the young people they have — the effects of a global slowdown are now in full view.
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