June 9, 2023

Dubai Week

Complete Dubai News World

Variation in US economic data…and confusion in markets

Wall Street

The US manufacturing sector contracted in May for the first time in 4 months, with the preliminary reading of the May manufacturing PMI index registering around 48.5 points. The previous reading was recorded last April by around 50.2 points.

Data above 50 points indicates growth, and below 50 points indicates contraction.

On the other hand, the estimated reading of the PMI index for the services sector in the United States registered a growth of 55.5 points in the current month of May, which was better than expectations, indicating that the index grew by only 52.6 points. It had registered a growth of 53.6 points in last April.

Global data from Standard & Poor’s showed its strongest growth in U.S. business activity in 13 months in May, as the U.S. purchasing managers’ index rose to 54.5 in May from 53.4 in April, beating analysts. Expectation in 50 points.

A key supporter of the rise was the fast-paced one-year growth rate as rising demand allowed these firms to raise prices in an effort to counter “historically high” inflationary pressures.

New orders from overseas were also particularly strong, with export orders growing for the first time in a year.

Markets are waiting to see if the US Federal Reserve will continue to raise interest rates, in light of reports of a tightening of monetary policy by US central officials, indicating the possibility of further interest rate hikes.

JPMorgan CEO Jamie Dimon warned that banks should plan for the next rate hike, which will be higher than most expected.

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“I think everybody should be prepared for higher rates” than current levels, which could be 6 or 7 percent, Dimon said.

Market performance

The Dow Jones index has been steady and moving since trading began 33,295.45 A point.

The S&P 500 index also fell 10.03 Points or 0.25 percent 4,183.10 A point.

The Nasdaq fell slightly 22.32 Point or 0.18 percent 12,698.62 A point.