What Happened? New York Fed's Empire State Index Drops to Negative Levels!

<p>&nbsp;The New York Fed's Empire State index of business conditions, a measure of manufacturing activity in the country, fell 6.5 points in October to a negative 4.6, according to the regional Fed bank report on Monday.</p><p><br /></p><p>Economists even expect a negative reading of 6, based on a survey by the Wall Street Journal. Any reading below zero indicates deteriorating conditions.</p><p><br /></p><p>The shipping index declined to 1.4 in the month. Unprocessed orders declined 19.1 points to a negative value of 13.9. Employment increased slightly in October while prices declined slightly.</p><p><br /></p><p>Looking ahead, firms are still relatively optimistic about the six-month outlook, the regional Fed bank reported.</p><p><br /></p><p><br /></p><p>The overall decline in October came after a strong increase in September. The index has been highly volatile over the past two years with some very negative readings followed by gains.</p><p><br /></p><p>Some economists see signs that manufacturing is bottoming out, but other economists are more skeptical about a reversal of this trend.</p><p><br /></p><p>Last month, the nationwide ISM factory index improved to 49% in September. While still negative, it was the highest reading in nearly a year.</p><p><br /></p><p>DJIA SPX stocks are expected to open slightly higher on Monday, while the 10-year bond yield rose to 4.70% in early trade.</p>