US markets suffered a bizarre morning of volatility after the Institute for Supply Management revised its closely watched manufacturing survey twice in the space of a couple of hours.
Although economic data are often revised, it normally takes months, not minutes. The incident highlights the sensitivity of financial markets to a survey-based indicator put out by a private organisation.
At 10am, the ISM said its purchasing managers’ index had fallen to 53.2 in May, down from 54.9 in April and well below market expectations of 55.5. Such a fall would be a worrying sign of economic weakness. Ten-year Treasury yields immediately dropped from 2.51 to 2.49 per cent.
Then around 11.30, the ISM corrected the figure to 56, saying it had incorrectly applied the seasonal adjustment from the previous month. Markets rallied. But that was not the end – about an hour later, the ISM corrected its figure again to 55.4. That left 10-year yields trading at around 2.53 per cent.
David Ader, strategist at CRT Capital, said: “The market was weaker before, goosed with [the first revision], and now with full news out is weaker again.”
The ISM did not immediately respond to a request for comment.
The second revision led Joshua Shapiro, chief US economist at MFR, to say the index was “one from The Three Stooges school of statistics”. Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi UFJ, said: “Another revision, the only question is whether two wrongs make a right?”
The ISM index is constructed by asking purchasing managers about expansion or contraction in their production, their inventories, plans for new hiring and the amount of new orders.
A reading above 50 is consistent with expanding activity. Economists value ISM as a leading indicator of future activity, and thus a sign of where harder data – such as the monthly non-farm payrolls report – is likely to go next.
Michael Kastner, principal at Halyard Asset Management, said: “It’s embarrassing for ISM, we usually get a revision a month or so later.” After the initial print that was softer than expected, Mr Kastner said: “I was scratching my head when it came that low.”
The revised data are consistent with an economy bouncing back from a dismal first quarter, when freezing winter weather and a run down in inventories caused it to contract at an annualised pace of 1 per cent.
However, there was one disappointment in the data, with the employment sub-index falling from 54.7 to 52.8. That suggests faster growth in activity is still not turning into rapid jobs growth, which in turn would feed a broader recovery.
CRT Capital策略师戴维?阿德(David Ader)表示：“之前市场较为疲软，第一次修正刺激市场走高。现在，所有信息都公布了，市场又再次走软。”
对于第二次修正，MFR首席美国经济学家乔舒亚?夏皮罗(Joshua Shapiro)表示，该指数简直是“由活宝三人组统计学派发布的数据”。三菱东京UFJ银行(Bank of Tokyo-Mitsubishi UFJ)首席金融经济学家克里斯?鲁普基(Chris Rupkey)表示：“对于第二次修正，唯一的问题是两次错误是否让最终的数据变得正确？”
Halyard资产管理公司(Halyard Asset Management)主管迈克尔?卡斯特纳(Michael Kastner)说：“对于ISM来说，此事非常尴尬，我们通常在初始数据公布一个月左右之后才会拿到修正数据。”对低于预期的初始数据，卡斯特纳表示：“初始数据如此之低让我不禁挠头。”