Analysts at Nordea Markets suggest that we have started to receive more evident signs of a slowdown in US key figures.
Key Quotes
“Most worryingly, the Richmond manufacturing index is now in “contraction territory”, when used to predict the future value of the ISM manufacturing index (Richmond manufacturing survey: -8 versus consensus of 14).”
“The Richmond Fed is not the only indicator that points to below-50 readings in the ISM index three to five months from now – financial condition indices point in the same direction.”
“The market is, though, probably not discounting a sub-54-55 reading in the ISM (yet). Judging from the relationship between the cyclicals to defensives ratio on the S&P 500 versus the ISM index, the market has front-runned a drop to 54-55 in the ISM index. But a move below that in the ISM index doesn’t look fully discounted in the equity space yet.”
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