ISM
The ISM has moved back into prominence as an indicator of the factory sector. It's probably the best single gauge of the health of the factory sector, and it has the added advantage of being very nearly the first thing reported each month. The September data will be reported on Monday at 10 a.m. Eastern.
Economists surveyed by MarketWatch are looking for a slight pullback in the ISM to 53.7% in September from 54.5% in August. In the ISM, the 50% is the dividing line between growth and contraction, so anything around 54% is pretty healthy, while anything under 52% would ring some alarm bells.
The Fed always cuts rates once the ISM drops consistently below 50%.
Following back-to-back declines in orders for durable goods and a surprising contraction in the Philadelphia Fed survey, investors and the Fed are watching the ISM carefully to see if it too will slow a sharp slowing in industrial activity.
The soft landing scenario depends in large part on the continued growth of capital spending to offset weakness in the consumer sector as the collapse in housing begins to make consumers feel poorer.
"In light of the Philly and orders data, the ISM has now taken on an even greater degree of importance," Shepherdson said. "A significant dip would hugely increase the chance that the apparent softening in industry is real. For now, however, we are skeptical."
"Corporate spending on new equipment should continue to support the industrial sector," said Michael Feroli, an economist for JP Morgan Chase Bank. "Demand for equipment and machinery should remain strong for the foreseeable future."
The ISM has moved back into prominence as an indicator of the factory sector. It's probably the best single gauge of the health of the factory sector, and it has the added advantage of being very nearly the first thing reported each month. The September data will be reported on Monday at 10 a.m. Eastern.
Economists surveyed by MarketWatch are looking for a slight pullback in the ISM to 53.7% in September from 54.5% in August. In the ISM, the 50% is the dividing line between growth and contraction, so anything around 54% is pretty healthy, while anything under 52% would ring some alarm bells.
The Fed always cuts rates once the ISM drops consistently below 50%.
Following back-to-back declines in orders for durable goods and a surprising contraction in the Philadelphia Fed survey, investors and the Fed are watching the ISM carefully to see if it too will slow a sharp slowing in industrial activity.
The soft landing scenario depends in large part on the continued growth of capital spending to offset weakness in the consumer sector as the collapse in housing begins to make consumers feel poorer.
"In light of the Philly and orders data, the ISM has now taken on an even greater degree of importance," Shepherdson said. "A significant dip would hugely increase the chance that the apparent softening in industry is real. For now, however, we are skeptical."
"Corporate spending on new equipment should continue to support the industrial sector," said Michael Feroli, an economist for JP Morgan Chase Bank. "Demand for equipment and machinery should remain strong for the foreseeable future."
Trade what you see - Not what you think 
