Manufacturing Slowing

From CNBC:

Growth in U.S. factory activity slipped in November to the lowest since January as tight credit conditions and the housing downturn restrained production, according to an industry report released Monday.

The Institute for Supply Management said its index of national factory activity edged down for the fifth straight month, to 50.8 from 50.9 in October, above economists' median forecast for a slip to 50.5. A reading of 50 denotes growth.

Here is a link to the report.

Let's coordinate this data with other data points.



Durable Goods orders have been in a general decline for the last two years. But look closely at the blue line which is the year-over-year percent change. Notice it has been in negative territory for most of the time since late last year.



Industrial production has been declining since last last year. However, the overall growth is still positive. It's in a slower growth phase right now.



As a result of all this negatively in the, the industrial ETF has been declining since early October. While is is currently over the 200 day simple moving average(SMA), the shorter SMAs (the 10 and 20) are both headed lower. The 50 day SMA recently turned lower as well. The index has yet to convincingly break the upside resistance from the downtrend line started in early October. Traders are obviously concerned about this sector.

It's also interesting to note that while exports have been increasing strongly for most of this year, that boost has not saved this sector from the market downturn.