- The Journal of Commerce Industrial Price Commodity Smoothed Price Index, where half the items it tracks don’t trade on futures exchanges and therefore a better sign of actual economic activity, is plunging.
- Manufacturing indices are sliding, such as China’s Purchasing Manager Index, as well as indicators in the Eurozone and the ISM survey in the US.
- Stocks are correcting;
- The 10-year U.S. Treasury yield are dropping; and
- The money supply in Europe and the US is flat or falling.
Speaking of NFP, Barry Ritholz at The Big Picture analyzed the correlation between the ISM Manufacturing Index and NFP and asks the question: “Is this as good as it gets?”
Market sentiment still upbeat
Intermediate term sentiment indicators are still worrisome as Bespoke pointed out that the Street’s investment strategists remain bullish, which is contrarian bearish.
Given the recent change in tone in the market action, I believe that investors should be adopting a more defensive posture in their asset allocation.