Review of the ISM non-manufacturing, beating market expectations - Nomura

Analysts at Nomura offered their review of the ISM non-manufacturing.

Key Quotes:

"The ISM non-manufacturing index increased to 57.2 in November, beating market expectations (Nomura: 56.2, Consensus: 55.5), returning to levels seen in September. Details likely confirm that the slowdown in October was transitory. In particular, business activity index rebounded to 61.7 in November from 57.7 in October, indicating acceleration in activity in this sector. New orders index edged lower but remained elevated at 57.0, implying that activity may likely remain healthy in the near term.

Employment index reversed the slowdown in October and moved up to 58.2, the highest reading since October 2015, suggesting upbeat hiring activity in the sector. This improvement appears consistent with the November employment report which suggests better private job gains.

Overall, this report is a solid reading from the non-manufacturing sector. Many business and consumer surveys in November appear to have experienced a "Trump bump." Last week, Chicago PMI and ISM manufacturing index surprised the market to the upside, pointing to a positive outlook on the manufacturing sector.

Conference Board’s consumer confidence index surged strongly above expectations, suggesting that the consumer outlook has somewhat brightened. We will be monitoring if this improved sentiment actually translates into better activity in the near term."