The September Pop in Manufacturing
ISM's Manufacturing Index surged most unexpectedly in September, indicating a robust expansion in the sector, which by some accounts represents around 20% of all US economic activity. US stock and bond markets were spooked not only by the 59.4 reading, which is seen by some as a clear signal that the Fed will keep tightening, but also by some scary inflation news embedded in the report. Some wags see Katrina figuring into the top-line number, while some see Katrina being ignored by the factories.
Meanwhile, the yield on the 10-year Treasury Note is over 4.38% now, rising as it slowly eats away at more and more of Greenspan's old conundrum.