Tuesday, 05/23 – The Manufacturing PMI captures business conditions in the manufacturing sector, which contributes a significant part of total GDP; thus, the manufacturing PMI is an important indicator of business conditions and the overall economic condition in the U.S. Services PMI captures business conditions in the services sector;
Why?
it is a crucial indicator since the services sector is responsible for over 77% of total U.S. GDP. Stronger-than-expected PMI readings would be inflationary, while weaker-than-expected data would suggest that the economy is cooling.
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Suppose the Manufacturing PMI came in at 59.0, up from the previous month's 58.0, suggesting the manufacturing sector is expanding at a faster rate. Investors could look at companies such as Boeing (BA), Caterpillar (CAT), or 3M (MMM) as they are major players in the manufacturing industry.
If the Services PMI were to rise to 57.5 from 56.0, indicating strong growth in the service industry, this could potentially benefit companies like Amazon (AMZN) in the online retail sector or Disney (DIS) in the entertainment industry.
» April’s Core Personal Consumption Expenditures – Friday, 05/26 –
Core PCE provides a measure of the prices paid by people for domestic purchases of goods and services, excluding the prices of food and energy.
Why
The core PCE is the Fed’s preferred inflation measure. The central bank has a 2% target. If the data point comes in higher than expected, it could weaken the case for the Fed’s pause in rate increases in June
Suppose the Core PCE Index rose 0.5% month-over-month, beating the anticipated increase of 0.3%. This would suggest higher inflation than expected. Higher inflation could lead to higher interest rates, which generally benefit financial companies like JPMorgan Chase (JPM) and Goldman Sachs (GS), but might adversely affect growth-oriented tech companies like Meta or Apple (AAPL).
. » April’s Durable Goods Orders Friday, 05/26 – this gauge measures the cost of orders received by manufacturers
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