When growth deteriorates via Purchasing manufacturing Index, the fed is pressured into cutting rates. Although we are entering a slowdown you must be ready for growth to deteriorate and the fed to flip dovish. If and when it gets ugly, they will lower rates releasing liquidity into the system
US PMI figures are falling from the peak 63.7 to 53.1, and many investors are concerned of a downturn. Its increasingly likely, but not yet...
You can see that many major SP500 market declines didn't occur until the PMI figure reached 50; May 1998 , Oct 2000, Oct 2007. The last was Sep 2019 and the market kept rallying until Feb 2020. The trend is certainly...
The ISM manufacturing index or purchasing managers' index is considered a key indicator of the state of the U.S. economy.
It indicates the level of demand for products by measuring the amount of ordering activity at the nation's factories.
The PMI number, which is announced on the first business day of each month, can greatly influence investor and business...
Selections come into action the 3rd week of September,
when Global Derivatives square at the BIS.
Norway September 13, 2021
Russia September 19, 2021
CANADA September 20, 2021
Iceland September 25, 2021
Germany September 26, 2021
The dollar seems not to be performing for the past couple of weeks
TECH gains therefore manufacturing gains
Tech new reason for possible less employment
Neutral I would Wait for confirmation of CPI INDEX before ISM final say
The Purchasing Managers Index is a diffusion index summarizing economic activity in the manufacturing sector in the US. The index is based on a survey of manufacturing supply executives conducted by the Institute of Supply Management. Participants are asked to gauge activity in a number of categories like new orders, inventories, and production and these...
In May we find out how much damage the Corona virus has caused.
I expect an index around 28 and it will confirm the recession. Now this is a lagging indicator which means that things happen first and then shows how much growth has been effected the month before.
In my opinion, the coming years will be very hard. High unemployment figures, bankruptcies, unrest...
No, not really. Only 3 of 7 divergences signaled recessions in the last 50 years. Besides, some recessions did not have any divergence.
So data doesn't support the recession is coming thesis.
Red flag -> Divergence with recession following
Green flag -> Divergence w/o recession
? -> No divergence signal before recession
(This post is in response to some...
It is interesting to note that there is a current clear divergence between the SPX and the ISM Manufacturing Index, that started back in January 2019 when the Fed stopped raising rates. The SPX has shot higher, while the ISM has continued to drop crossing below 50 and therefore indicating a contraction. In the past this drop below 50 has lead to a stock market...
SPX yoy performance vs PMI Manufacturing index
Tried to replicate TeddyVallee's chart w/o z-scores he published on Twitter
Big divergences I could find are marked with flags. I may be missing a few so make your own decisions
Looks like when PMI and SPX diverged, most of the time SPX was correct!
Could it be that stocks are the first to feel the liquidity...