Daily Market Commentary for June 1, 2011

The month of June got off on a sour note after ADP data disappointed the street.(read more at Millennium-Traders.Com)
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Institute for Supply Management reported growth in the U.S. manufacturing sector slowed, with its closely watched gauge dropping to 53.5% in May from 60.4% in April - its lowest reading in 13 months. The drop marks the third straight decline for the ISM and the biggest one-month drop since 1984. Softening was as a result of fewer orders and less production. Regardless of the fact that any reading over 50% indicates more manufacturers are expanding instead of shrinking, the index has tumbled since hitting a seven-year peak of 61.4% just three months ago. Over the past two years companies rebuilt depleted inventories with demand rising overseas. Global economy appears to be decelerating. Regional reports from Philadelphia, New York and Chicago all showed a sharp slowdown in growth over the last month. Treasury prices rose sharply and pushed the benchmark 10-year note yield below 3% for the first time since early December.

Of the 18 industries tracked, 14 expanded in May, down from 17 in April. Industries that contracted consist of food, beverage and furniture. New-orders index per ISM fell 10.7 percentage points to 51.0% while production index sank 9.8 percentage points to 54.0%. Backlog of orders index which reflects future sales in the pipeline, plunged 10.5 percentage points to 50.5%. Employment index, fell to 58.2% from 62.7% in April and the inventories gauge declined to 48.7% from 53.6%. Despite the decline of the ISM gauge -manufacturers who took part in the survey said they still see solid demand for products. The biggest problem reported by companies is of course higher prices. The price gauge for the ISM fell to 76.5% in May from 85.5% in April. Economists report that higher prices of oil and other commodities contributed to a reduction in global output as well as, international demand for manufactured goods. To sum it up, Inflation is evident everywhere in virtually every material purchased.

ProShares Ultra Silver (NYSEArca: AGQ) was down 5% into early afternoon trading as the stock continues its trend as a player by heavy hitting day traders.

51job (NasdaqGS: JOBS) was down 2% into early afternoon trading after reporting Q1 results missed expectations.

Dollar General (NYSE: DG) was lower by 7% into early afternoon trading after reporting adjusted Q1 earnings below expectations.

Lions Gate Entertainment (NYSE: LGF) was hosting a gain of 6% into early afternoon trading after repotting better than anticipated Q4 results.

Daktronics (NasdaqGS: DAKT) was higher by 9% into early afternoon trading after repotting better than anticipated Q4 results.



Economic data released today:

U.S. ICSC/Goldman Sachs Chain Store Sales: +2.8% on Year and US ICSC/Goldman Sachs Chain Store Sales +0.4% in May 28 week.

Mortgage Bankers Association [MBA] Mortgage Applications: U.S. MBA Refinance Index -5.74% at 2,442.9 compared to last week at 2,591.7; U.S. Mortgage Application Volume fell last week despite lower rates; U.S. MBA Purchase Index -0.02% at 191.4 compared to last week at 191.4; U.S. MBA Market Index -3.96% at 519.4 compared to last week at 540.8.

ADP Nonfarm Employment Change: ADP May US Private Sector Jobs +38,000; ADP May US Private Sector Jobs Expected +190,000.

Construction Spending: U.S. Construction Spending +0.4% in April vs. Consensus +0.2%; March Construction Spending Revised to +0.1% from +1.4%

Institute of Supply Management [ISM] Manufacturing Index: U.S. ISM May Employment Index 58.2 vs. April 62.7; U.S. ISM May New Orders Index 51.0 vs. April 61.7; U.S. ISM May Inventories Index 48.7 vs. April 53.6; U.S. ISM May Production Index 54.0 vs. April 63.8; U.S. ISM May Manufacturing PMI 53.5 vs. April 60.4; U.S. ISM May Manufacturing PMI Expected 57.0; U.S. ISM May Prices Index 76.5 vs. April 85.5.



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