Today marks the beginning of corporate earnings season and the first day of the traditionally feared month of October. But the economic data that hit the markets today was anything but ordinary or traditional. The ISM US manufacturing data came in at a 10-year low. It also followed reports of weak manufacturing data out of Europe as well.

 

Markets tumbled in what turned out to be the worst one-day drop in the Dow and S&P since August 23. 

 

The Dow closed down -343.79 points; the S&P 500 declined 1.2%; and the Nasdaq tumbled 1.1%.

 

According to President Trump, dollar strength and high interest rates contributed to the nation’s weak manufacturing activity. He tweeted:

 

“As I predicted, Jay Powell and the Federal Reserve have allowed the Dollar to get so strong, especially relative to ALL other currencies, that our manufacturers are being negatively affected. Fed Rate too high. They are their own worst enemies, they don’t have a clue. Pathetic!”

 

But Timothy Fiore, ISM’s Chair, pointed neither to the dollar nor interest rates but the trade war as the main factors weighing down on US manufacturing. As Tribeca Trade Group CEO Christian Fromhertz told CNBC,  “The manufacturing side is telling us something. It’s a combination of global growth and we’ve got a trade war that’s been going on for a year and a half…That’s been freezing things up. The longer this trade war keeps going, the more damage it does.”

 

Meanwhile, Gold is up +14.00, to 1,487.00  Silver also rose +0.307 to 17.31, and the VIX also moved higher +2.32 to 18.56.

 

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