"Data released for September suggests the economy is still firmly in expansion, but a slowdown in manufacturing and signals of financial weakness continue to be a drag on the [Confluence Diffusion] index. Currently, our diffusion index shows that nine out of 11 indicators are in expansion territory, with several indicators approaching warning territory.
[One of the eleven indicators referenced above is the ISM Manufacturing Index smoothed using a six month moving average] …The ISM Manufacturing Index monitors employment, production, inventories, new orders and supplier deliveries. The current reading of 52.2 suggests manufacturing activity is quickly losing momentum. Out of the 10 components measured in the survey, supplier delivery is the only one in expansion territory. Even though the diffusion index focuses on supplier delivery, we feel that other components provide insights as to the possible causes of manufacturing slowdown. Based on the report, new export orders appear to be the biggest drag on manufacturing activity, which suggests that much of the slowdown is due to a reduction in global trade."
(Business Cycle Report dated 10/24/2019 by Thomas Wash of Confluence Investment Management)
Full article can be read here: http://www.confluenceinvestment.com/wp-content/uploads/business_cycle_report_Oct_24_2019.pdf