One fund manager calls it a horror show, others are predicting the Federal Reserve will have to extend its unconventional measures and stocks across the world are falling heavily.
The data from the world’s largest economy has fallen so sharply that investors have been caught off guard, raising fears over a double-dip recession.
It was a big fall in ISM Manufacturing PMI data on Wednesday that triggered the fall in stocks and saw money pour into Treasurys, pushing the yield on the 10-year note below three percent.
The index fell from a very healthy 60.4 to 53.5 and while still indicating growth the scale of the fall has worried some economists who say it is too early to call this anything more than a slowdown.
“The move down wasn’t so surprising, as the headline index usually doesn’t hang above the 60 level for too long. That said, the large decline in the May new orders index (-10.7 points) does raise the concern that the slowdown may have a bit further to go,” Neil Soss, the chief economist at Credit Suisse in New York, wrote in a research note.
The sharp decline in the ISM manufacturing index to a 19-month low of 53.5 in May, "will only add to fears that the economy has hit another 'soft patch'," Paul Ashworth, the chief US economist at Capital Economics, wrote following the data.Page 1 of 3 | Next Page