Second Derivative Case Of Economic Recovery ..

Just an update, till we get a clearer view. The second derivative spin is making "weaker hands" nervous about the already, probably, lost opportunity to buy equities at market bottom ... As for top and bottom chasing - I am happy to earn the 60% of the directional move in the middle, and I leave the top and bottom 20% for the smarter guys. Sorry!

BNP Paribas published a research note on current US manufacturing conditions, based on surveys from the New York and Philadelphia Feds. They calculate the "NEM index" - a purchasing manager index for the US North East Manufacturing sector. The key findings so far:

The NEM index – a purchasing manager index for the North East Manufacturing sector, based on surveys from the New York and Philadelphia Feds ... – dropped to 31.6 in March from 35.5 in February, thus reaching a new low and indicating a further weakening in manufacturing conditions.

By contrast with the national PMI index (calculated from the ISM survey), the NEM index has kept on deteriorating in most recent months. These regional surveys thus tend to indicate that the improvement in the ISM is fragile.

Chart courtesy of BNP Paribas, click to enlarge.

My favourite ECRI WLI (will be updated tonight!) kept deteriorating too ... But some may argue that markets will turn at least couple of months ahead of the real economy. Lucky deserves it!

If that is not enough to cool the boiling brain, then probably the acknowledgement that - others missed too - helps? There are some highly regarded market strategists that missed the rally from March 6th lows, like Albert Edwards from Societe Generale, or even strongly believe that lows are still ahead, like David Rosenberg from BAC/Merrill Lynch(ed) ... Even the astute Jeff Saut from Raymond James sounded a bit concerned lately ...

Keep your eyes and mind open ... We may see a big rally despite my concerns!