ISM Manufacturing Index and S&P 500 1-Month Return The current S&P 500 option implied 1-month return distribution is pricing a low probability of a right tail relative to historical realised. Image: Goldman Sachs Global Investment Research
Fed Rate Cut vs. ISM Manufacturing Index and ISM Non-Manufacturing Index Since 1997, when the ISM Manufacturing Index is below 50 and the ISM Non-Manufacturing Index is above 52, the Fed is less aggressive, with about 68bp of easing on average. Image: Goldman Sachs Global Investment Research
U.S. ISM Manufacturing Index and S&P 500 Cyclicals vs. Defensives Chart showing that U.S. cyclicals sectors relative to defensive sectors are still pricing in a strong rebound in growth (R = 0.82). Image: Deutsche Bank Global Research
U.S. ISM Manufacturing Index and Recessions Since 1975, in 6 of 11 instances, a recession did not occur when the ISM fell below 50 and remained above 45.5. Image: Goldman Sachs Global Investment Research
U.S. ISM Manufacturing Index vs. S&P 500 Chart showing that the S&P 500 continues to price in a strong rebound in the ISM, from 49 to 54 (R = 0.62). Image: Deutsche Bank Global Research
Manufacturing’s Share of the U.S. Economy Manufacturing accounts for only 10% of U.S. GDP, but 25% to 45% of the market response. Image: Goldman Sachs Global Investment Research
American Semiconductor Sales Lead ISM Manufacturing Index by 3 Months This chart shows that the downtrend in American semiconductor sales is currently worrying. You may also like “ISM Manufacturing Index vs. S&P 500 Index since 2011.” Image: Deutsche Bank Global Research
Every Fed Tightening Cycle Has Preceded a Slowdown in the ISM Manufacturing Index Since 1950, pullbacks in the ISM Manufacturing Index has coincided with a recession or market selloff, except in 1995. Image: U.S. Global Investors
ISM PMI and S&P 500 What does a cooling in U.S. manufacturing growth mean for the S&P 500 in the coming months? Image: BofA Global Research
U.S. ISM Composite Index and U.S. Real GDP This chart shows the good correlation between the ISM Composite Index (services + manufacturing) and U.S. real GDP. What about U.S. GDP growth in 2020? Image: Deutsche Bank Global Research