Happy New Year.
Today's ISM is posting some of the weakest readings it ever has offered in its history that extends back to the late 1940s.
Also today the stock market 'jumped' crossing the 9,000 barrier (DJIA, of course) for the first time since 1998.
Another lost decade for investors.
The ISM is a reminder that the economic downturn is no flash in the pan. But the stock market's rise is a notice that investors, while bloodied, still have their wits and hopes about them.
The economy has been deeply damaged as has been the finances of all investors. But there is still economic activty and like people after a big snow storm, they are starting to dig their way back out and test the climate.
I am not so surprised by the ISM whose new order reading is the weakest in its entire history. The descent of the ISM in this cycle is stunning even bythe standards of recession. In its ninth month of this recession the ISM was the second strongests in recession hisotry since 1960 at that mark. But by the 13th month the index is at its weakest point for that month and at one of the weakest readings ever.
We are inthe grip an intense down phase of a manufacturing downturn. We still have to expect the next several months to be bad. The question is how soon will we recover? Stocks started 2008 on a good note a hopeful note as investors were not dismayed by the still-weak ISM. But a lot lies ahead of us. The Fed, the treaury the new Administration still have a lot to do. There is grounds for optimism ...and for caution.