Here's a Barron's article excerpt from Aug 20th, re chemical sector, link at bottom. Note that it mentions an ISM index at above 50% would be bullish ("sustainable momentum") for industry. New ISM number was reported this morning, went to 52.9% in Aug, was 48.9% in July:
"Other leading indicators, such as the ISM manufacturing index, support the notion of an industrial recovery. The most recent ISM survey at 48.9% still implies a contraction in U.S. manufacturing activity: An ISM index above 50% would indicate more sustainable momentum. Nonetheless, continued improvements in the ISM give confidence that year-over-year comparisons for chemical earnings likely troughed in the second quarter.
Perhaps even more important for sentiment on chemical shares, a sustained improvement in industrial activity should also translate into a stabilization in chemical prices and margins. Our leading indicator for chemical-sector pricing has reached its highest level in 10 months, which should indicate an abatement in the pressure on prices by the end of the year. Even in the face of rising raw materials with oil holding above $60 per barrel, chemical companies should face margin expansion with recovering volumes, helped by cost cutting, better fixed-cost absorption, and low-cost inventories.
Finally, the Chinese PMI [Purchasing Managers Index] survey has reported new orders ahead of the overall survey for the last two quarters, reinforcing sentiment on recovering chemical demand there (which could ripple through to Latin America as well)."
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