Shanghai-based securities brokerage and wealth manager, BNP Partners has warned that investors should not consider that a Fed rate hike in December is a “done deal”. The firm issued its caution to investors via a research note following what it called “appalling” US ISM manufacturing data that gave its worst showing since 2009.

The November ISM (Institute of Supply Management) index of US factory activity slipped to 48.6 compared with consensus expectations for a 50.5 reading. Anything below 50 is considered indicative of contraction within the manufacturing sector.

“The ISM data is considered a harbinger for the general movement in the broader economy,” said Yannick Touré, chief economist with BNP Partners’. “The Fed may not want to raise rates with the data clearly pointing to a slowing in a sector that makes up 12% of the US economy especially when data from the US Commerce Department released last week showed consumer spending was particularly tepid.”

BNP Partners has been loath to join others in their expectations for higher interest rates in December and has been a vocal skeptic of the central bank policy divergence where the Bank of Japan and the European Central Bank push ahead with their quantitative easing programs and the US Federal Reserve begins tightening monetary policy.

“It’s a fallacy that the US will allow its currency to strengthen even further when it hurts its export sector while China, Japan and Germany run away with the export ball thanks to weak currencies. A December hike is nowhere near a lock,” concluded Touré.

About BNP Partners:
At BNP Partners, they define effective wealth management as an overall strategy that seamlessly integrates their clients’ personal ROI (return-on-investment) aspirations with their investment management prowess.

Whilst today’s markets can often demonstrate the type of characteristics that have served to hamper the efforts of many traditional investment methodologies to secure the returns they once did, BNP Partners continue to secure exceptional returns for their esteemed clients utilizing a meticulously applied combination of those same traditional methods whilst diligently complementing them with new, pioneering techniques.