ISM Manufacturing PMI for April: 

The Employment Index is still in the contraction area, at 48.6, below the 50.3 mark, which, over time, is consistent with an increase in the BLS data on manufacturing employment. In contrast, the S&P Global data for manufacturing employment showed a fourth successive month of job creation, reflecting positive expectations regarding output requirements in the coming months, with companies investing further in operating capacity. We will see the employment data in the services sector on Friday, in which last week's S&P Global flash report provided a gloomier look.

However, both reports coincided with a contraction in New Orders as factories adjusted their inventories. Still, production remained in expansion territory, so in general, producers remain confident in the future, but they started the second quarter in a weak mode.

Interestingly, ISM PMI reported a decrease in production and new orders in the Machinery industry, matching the outlook presented by Caterpillar in its earnings call. This translated into a lower backlog of orders as new order rates and production output were insufficient to allow backlogs to grow.

Both reports, the ISM and the S&P Global coincided with input costs increasing sharply, with the rate of inflation quickening for the second consecutive month (especially oil, aluminum, steel, and plastics). However, output prices increased at a slower rate than in the three previous months, which is encouraging.