ISM NUMBERS COME IN WELL BELOW FORECAST; MARKETS REJOICE

The August ISM manufacturer numbers were just what the Fed needed to avoid having to hike rates. Look at these numbers, they’re deliciously abysmal.

10:00 | ECONX
August ISM Manufacturing 49.4 vs 52.2 Briefing.com consensus; July 52.6

10:00 | ECONX
July Construction Spending M/M 0.0% vs +0.6% Briefing.com consensus

Construction numbers were off big too. What ever will we do?

Via Briefing.com

The key takeaway from the report is that it plants a negative seed for third quarter GDP growth prospects and also supports the notion held by many market participants that the Federal Reserve should refrain from raising the fed funds rate at this month’s FOMC meeting.

The August reading is the first reading below 50.0 since February 2016 and it was driven by a downturn in every component index, with the exception of new exports orders, which was unchanged at 52.5.

The key indexes of new orders (49.1 from 56.9), production (to 49.6 from 55.4), employment (to 48.3 from 49.4), and backlog of orders (to 45.5 from 48.0) were all below 50.0.

The Prices Index (to 53.0 from 55.0) remained above 50.0, but still reflected a deceleration in price increases versus July.
Of the 18 manufacturing industries covered by the report, only six reported an increase in new orders in August.

Isn’t convenient for these numbers to present themselves to us now? Ever since these shit throwing numbers came out, markets have firmed, even oil. I suppose, a really crappy economy equals more market rigging. Why not? Seems like moar fun.

WTI is off by another 1.5% this morning and dropping fast. There are desperate reports that Saudi Arabia is seeking to convince OPEC to freeze production, in order to boost the value of soon to come public Saudi Aramco. However, the Iranians aren’t onboard and generally tell the Sauds to fuck themselves.

I wouldn’t trade anything ahead of tomorrow’s jobs report. Keep an eye on over leveraged garbage stocks for a barometer of the oil sector: WLL, CLR, CHK, OAS.

The  communists in China are the worst casino operators ever. In 2014, the government cracked down hard on corruption and grifters, causing Macau gaming revenues to plunge by mid 30% range.

After years of horrible numbers, finally, Macau posted a positive growth number, which is causing the stocks of casinos to surge.

Macau Gaming Inspection and Coordination Bureau reported August gross gaming rev +1.1% YoY to 18.84 bln patacas ($2.36 bln) vs -35.5% in Aug 2015 and -4.5% last month. GGR is down 9.1% YTD. Gross gaming rev peaked in 2014 and fell 34.3% in 2015 after the Chinese govt cracked down on money laundering in Macau. Estimates call for a ~low double digit decline this year.

If in fact Macau gaming is back, then shares of WYNN, MPEL and others are going to skyrocket.

Here is the casino sector in Exodus and its returns over the past two years.

The companies with heavy exposure to Macau have been halved since then. Lots of potential upside.