A Two-Month High for the S&P 500

The stock market is up again today. This comes after a painful weekend of protests across the country.

This is the first business day of the month and that’s usually when the ISM Manufacturing report comes out. I like this report because the lag time is fairly low. This morning’s report came in at 43.1. That’s actually not so terrible, though it’s not good.

U.S. manufacturing activity eased off an 11-year low in May, the strongest sign yet that the worst of the economic downturn was behind as businesses reopen, though the recovery from the Covid-19 crisis could take years because of high unemployment.

The Institute for Supply Management (ISM) said on Monday its index of national factory activity rose to a reading of 43.1 last month from 41.5 in April, which was the lowest level since April 2009. A reading below 50 indicates contraction in manufacturing, which accounts for 11% of the U.S. economy.

Economists polled by Reuters had forecast the index rising to 43.0 in May.

This morning’s construction spending report showed a decline of 2.9%. That’s also bad but not as bad as it could have been. It’s the lowest number since October 2018.

The S&P 500 looks to close today at a two-month high.

Posted by on June 1st, 2020 at 3:54 pm


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