We have a special place in our hearts for those who have been trying to call the “top” in ISMs and PMIs for the last 12-18 months. Without them, our macro call for US #GrowthAccelerating wouldn’t have been so differentiated!
- Today’s ISM (NOV reading) had a 58-handle for the 3rd month in the last 4.
- New Orders = 6th consecutive month > 60
- Currently running at the highest 3-period average since 2004.
Helped in part by both post-hurricane effects and continued export demand, production and employment should remain solid near-term.
Mean reverting series like this, of course, mean revert… and New Orders are no different. The Question remains, when?
As we’ve noted previously… there have only been 3 instances over the last 50 years in which New Orders have had a multi-month streak above the 65-level and just a single (early-cycle) 4-month streak in the last 30 years.
So, baseline expectation should be for some measure of give-back but that also shouldn’t dilute the reality of its late 2017 en fuego’ness.
To data dependence,
KM
