Welcome to Data Points, I am Brian Hamilton

This morning the all important ISM Manufacturing Index was released.  This forward looking report has a long track record of accurately gauging the direction of production, employment, new orders, inventories, prices, imports, and exports. 

Source: Bloomberg.com

As you can see in the chart below, the ISM index was hurting for a long period of time, from 2014 to 2016 the index suffered a sustained dip, but the index began to bounce back in the early part of 2017. 

There were several reasons for the index's improvement; increasing energy prices, a weak dollar, and the expansion of both the global and domestic economies. 

This morning's report came in at a reading of 59.1, slightly below last months revised reading of 59.3, but ahead of the expected reading of 58.6. 

The report also revealed that new orders continued to rush in as the index showed a reading of 65.4 in January, the best reading in 10 years.  Also backlogs remained at high levels with a reading of 56.2.

This data confirms that overall factory sector trends remain red hot.

Further, this overall strong report from the ISM is a positive future indicator for the industrial, factory, manufacturing, and production segments of the economy. 

Specifically, Industrial companies like Caterpillar, H & E Equipment, Colfax Corp, and Applied Industrial Technologies, all of whom currently carry a Zacks Rank #1 Strong Buy rating will benefit from this report.

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