US Services PMI rose to a 12-month high, in a cautionary reminder of services inflation.
Investors will be hoping for good news from Friday’s US Durable Goods Orders.
The Dow Jones Industrial Average (DJIA) tumbled on Thursday, falling -527 points and tumbling below 39,150.00 as investors pulled back in the face of declining hopes for a September interest rate cut from the Federal Reserve (Fed).
May’s S&P Global Services Purchasing Managers Index (PMI) rose to a 12-month high of 50.9 on Thursday, well above the forecast steady print at 50.0. Accelerating services activity bodes poorly for investors desperate for signs of a rate trim from the Fed. Fitch Ratings warned the entire market on Wednesday that services inflation will likely remain sticky for some time, keeping rates elevated for much longer than many investors have been hoping for.
Read more: US S&P Global Manufacturing PMI surprised to the upside in May
According to the CME’s FedWatch Tool, rate traders are pricing in barely 50% odds of at least a quarter-point cut from the Fed in September, down significantly from the 70% odds priced in at the beginning of the trading week. US data will have one last chance to throw investors a bone on Friday, with US Durable Goods on the table.
US Durable Goods in April are expected to decline -0.8% MoM, down sharply from the previous month’s 2.6%. The University of Michigan’s Consumer Sentiment Index in May is forecast to tick upwards to 67.5 from the previous period’s 67.4, while UoM 5-year Consumer Inflation Expectations are expected to remain pinned at 3.1% in May.
The Dow Jones is sharply lower on Thursday as the US market’s worst-performing equity index. All of the Dow Jones’ constituent securities are in the red for the day, with losses led by Boeing Co. (BA), which is getting absolutely shattered on Thursday. BA tumbled -6.75% to $173.68 per share after the company announced negative cash flow with no expectations of the battered airplane manufacturer’s deliveries recovering in the second quarter.
The Dow Jones sees accelerating losses as the index turns bearish, falling back from record highs above 40,000.00. Thursday has been incredibly one-sided intraday trading, tumbling from the day’s early peaks near 39,760.00.
The DJIA is slipping back towards the 50-day Exponential Moving Average (EMA) at 38,908.36. Despite near-term declines, the index is still buried deep in bull country, with the index trading well above the 200-day EMA at 37,141.05.
S&P Global Services PMI
The S&P Global Services Purchasing Managers Index (PMI), released on a monthly basis, is a leading indicator gauging business activity in the US services sector. As the services sector dominates a large part of the economy, the Services PMI is an important indicator gauging the state of overall economic conditions. The data is derived from surveys of senior executives at private-sector companies from the services sector. Survey responses reflect the change, if any, in the current month compared to the previous month and can anticipate changing trends in official data series such as Gross Domestic Product (GDP), industrial production, employment and inflation. A reading above 50 indicates that the services economy is generally expanding, a bullish sign for the US Dollar (USD). Meanwhile, a reading below 50 signals that activity among service providers is generally declining, which is seen as bearish for USD.
Last release: Thu May 23, 2024 13:45 (Prel)
Frequency: Monthly
Actual: 54.8
Consensus: 51.3
Previous: 51.3
Source: S&P Global
Share:
Feed news
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
