The US economy has been perceived as resistant to global slowdown. The latest ISM does not fit into that narrative though – a drop to 47.8 means a risk of manufacturing recession is alive.
Defying a small uptick in Markit PMI the US ISM slid to 47.8 from 49.1 points and well short of expectations of 50.1 points. This number points at a significant contraction in industry, fuelled by declines in new orders and employment.
Start investing today or test a free demo
Open real account TRY DEMO Download mobile app Download mobile app
No longer resistant? US manufacturing ISM dives to the lowest of the decade! Source: Macrobond, XTB Research
Interestingly, market reaction is muted. US indices behave as if they were resistant to any kind of bad news lately. More importantly, the strong US dollar could be a major problem for the US economy.
US500 had no choice but to dive back into the channel but we will see for how long the bears dominate – buyers have been returning like a boomerang lately. Source: xStation5
