The thousand point thresholds are dropping like flies these days.  With the caveat that a thousand points becomes an increasingly small percentage of the overall index as prices rise, the DJIA just crossed its fourth 1,000 point threshold since Trump’s election last November.  The table below shows the date that the DJIA has first crossed each 1,000 point threshold on a closing basis since it first closed above 1,000 back on 11/14/72. For each threshold, we show the date the DJIA first closed above that threshold, how many days transpired between that cross and the prior 1,000 point threshold, the percentage that each thousand point threshold represents of the index’s price, and then how many upside and downside crosses the DJIA has had with each level.

Since the election, the DJIA has now crossed four thousand point thresholds, and with each one, there has been very little in the way of looking back. For instance, once the DJIA crossed 19,000 it never closed back below that level. For 20,000, once it crossed that level, it only closed below it again once, while 21,000 only saw two subsequent closes. In looking for comparable periods, the current period is somewhat similar to the late 1990s, when the DJIA also crossed several 1,000 point thresholds in very short order. In the current period, these levels have been coming and going a lot faster, but again, it’s also important to remember that they represent a much smaller percentage of the overall index’s value than the levels that were crossed in the 1990s.  Finally, while it may seem as though the move from 21K to 22K was quick, at 154 calendar days (if that level holds between now and the closing bell), it was nearly five times longer than the time that elapsed between 20K and 21K (35 days) and two and a half times longer than the time it took to go from 19K to 20K.

The headlines will say that today’s ISM Manufacturing report was weaker than expected, continuing a trend we have seen in the data for some months now, but the reality is that today’s report was still very strong.  Just look at the commentary associated with today’s report.  Whenever you see adjectives like strong, best, huge, and steady dominate, it’s a sign of strength, and this month’s commentary was littered with them.  There was literally not one mention of a weaker manufacturing environment!

As shown in the chart below, the headline index in this month’s report dropped from a multi-year high of 57.8 to a still strong reading of 56.3.  Even at current levels, though, the index is near its highest levels of the expansion.

Taking a quick look at the internals of the report, they were mostly similar to the headline index, as declines were relatively muted and mostly coming from their highest (or near highest) levels of the expansion.  The only categories which showed m/m increases were Prices Paid and Import Orders.  While the increase in Prices Paid makes sense given the weaker dollar, a pickup in import orders doesn’t usually go hand in hand with a weak dollar.  On a y/y basis, most components of the ISM are up considerably from their levels one year ago.  The only category to see a decline was Customer Inventories.

As mentioned above, Import Orders was one of only two categories that ticked higher this month even as the dollar weakened.  What makes this month’s increase in the Import Orders category even more significant is that it’s the highest reading in more than three years!

Finally, each month ISM also asks respondents which commodities are up in price, down in price, and which are in short supply.  In this month’s survey, respondents noted shortages in eight different commodities, which is extremely high by historical standards.  Going back to 2000, there has never been a month where more commodities were in short supply, and the last time there were eight was back in October 2005.