At 11:00 am (US ET) the Kansas City Fed released the August manufacturing index for that region. This is what lit the match today on the sell off.
Usually the Kansas City fed data is a yawner, not today.
Survey of Tenth District Manufacturing (Kansas City Fed District)
Tenth District manufacturing activity slowed in August, and producers were somewhat less optimistic than in previous months. Price indexes in the survey were mostly unchanged.
The net percentage of firms reporting month-over-month increases in production in August was 0, down from 14 in July and 3 in June (Tables 1 & 2, Chart). The slowdown in production occurred among both durable and nondurable goods producing plants, with the exception of aircraft and electronic equipment producers, who reported some improvements. Other month-over-month indicators also fell. The shipments, new orders, and employment indexes dropped into negative territory, and the order backlog index slipped from -2 to -16. The new orders for exports index was essentially flat, while supplier delivery times increased modestly. The raw materials inventory index rose from -1 to 6, and the finished goods inventory index also inched higher.
Year-over-year factory indexes decreased after a strong rebound last month, but remained in positive territory. The production index fell from 25 to 18, and the shipments, new orders, and order backlog indexes also slowed. The capital expenditure index dropped from 4 to -9, and the new orders for exports index also eased somewhat. In contrast, the employment index edged higher from -10 to -8, its highest level since mid-2008. The raw materials inventory index rose from -9 to -5, but the finished goods inventory index decreased for the second straight month.
Future factory activity indexes mostly fell in August, but remained suggestive of modest future growth. The future production index dropped from 23 to 10, and the future shipments, new orders, and order backlog indexes also decreased. In contrast, the future capital expenditures index was largely unchanged, while the future new orders for exports index rose modestly. The future employment index also inched higher after four straight months of decreases. Both inventory indexes increased slightly.
Most price indexes showed little change from the previous survey. The month-over-month finished goods price index rose from -9 to -4, while the raw materials price index remained unchanged. Both year-over-year price indexes were generally stable as well. The future raw materials price index edged higher from 26 to 30, while the future finished goods price index slowed slightly from 9 to 7, as only a small number of firms plan to pass recent cost increases through to customers. (emphasis added)
As I discussed in tonight’s market video it was the release of the Kansas City Fed data that killed the markets chances of any intra-day rally attempts.




