In October, steel production fell sharply, tipping off weakness in a variety of factory statistics, most notably the ISM index and durable-goods orders (excluding aircraft).
The weakness is undoubtedly related to the recent cutbacks in automobile production related to unwanted gains in automobile inventories. For most of this year, steel production held in a range of 2.05 million to 2.10 million tons before falling sharply to 1.90 million tons in the week ended Oct. 30. In the latest week ended yesterday, production edged up to 1.91 million, a level still far beneath previous levels.
Hence, the best that can be said for the factory sector is that conditions are not deteriorating as fast as before, and whatever improvement has occurred has been small thus far.
P.S. Will you be there when Cramer makes his next move?
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Tony Crescenzi is the chief bond market strategist at Miller Tabak + Co., LLC, and advises many of the nation's top institutional investors on issues related to the bond market, the economy and other macro-related issues. At the request of the Federal Reserve, Crescenzi is a regular participant in the board's Livingston Survey of economic forecasters. He is also the author of The Strategic Bond Investor. At the time of publication, Crescenzi or Miller Tabak had no positions in the securities mentioned in this column, although holdings can change at any time. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Crescenzi also is the founder of Bondtalk.com, a popular Web site covering the bond market and the economy. Crescenzi appreciates your feedback; click here to send him an email.
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