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Economic Data Deluge

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After the opening bell this morning, we will get new looks at important domestic manufacturing data, from both PMI and ISM surveys. PMI is coming off multi-year lows with this next report, while ISM registered a sub-50% read for August. For both indexes, a headline number above 50 indicates positive growth; under 50 indicates contraction.

The expectation for September PMI Manufacturing is 51.0 — up from the decade-low 50.3 reported for August. This low number was revised up from the preliminary 49.9. So, while we are seeing revisions and expectations above 50, it’s not by much at all.

For historical context, multi-year highs were reached on PMI goods-producing in late 2014 — right before they spent the next couple months falling precipitously. We did see an upswing in the graph in early 2018, but have fallen to lower lows in the months since.

Yesterday, regional PMI from Chicago put up a headline of 47.1 for September, down from the 50.4 in August. Again, this is depicting contraction in this Midwestern manufacturing data, which may possibly work on this morning’s general PMI headline. For now, we’ll continue to look for the 51.0 estimate being reached.

ISM Manufacturing, expected roughly 15 minutes after PMI data is released, is estimated to come in at 50.2%. This is up from the 49.1% reported for August (which itself was a negative surprise from the 51.1% estimated ahead of that report, as well as the first month of contraction since January 2016) and the 51.2% from June. Once again, we’re seeing some slack in manufacturing production of late, but staying above the 50% level will help keep negative sentiment from creeping into market activity.

Hitting the headlines a half hour prior to today’s opening bell, Charles Schwab SCHW has announced it will be eliminating commissions for stocks, ETFs and options. This has had an immediate affect on trading companies, with Schwab itself tumbling 6% on the news, Interactive Brokers IBKR -12% and TD Ameritrade AMTD -14%. Thus far, major pre-market indexes are still expected to open in the green.

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