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Friday, June 21, 2024

S&P 500 Dips as Dollar Strengthens on Mixed PMI Data

Key Takeaways:

  • The S&P 500 decreased by 0.3%, while the U.S. Dollar Index (DXY) gained 0.47% following the release of PMI data for March 2024.
  • The ISM Manufacturing PMI came in at 50.3, exceeding the previous reading of 47.8 and the consensus estimate of 48.4.
  • In a recent speech, Governor Waller expressed that the risk of waiting to ease monetary policy is small compared to acting too soon, suggesting a possible rate cut in the near future.

The S&P 500 decreased 0.3% today, while the DXY gained 0.47% following the release of PMI data for March.

The ISM Manufacturing PMI came in at 50.3, above the previous reading of 47.8 and the consensus estimate of 48.4. This growth in manufacturing provided support for the U.S. dollar, as indicated in the chart below:

DXY 1-Minute Price Data

However, the S&P Global Manufacturing PMI came in with a reading of 51.9, falling short of the consensus of 52.5 and the previous month’s 52.2.
The slower pace of expansion possibly led to the decline of the S&P 500, while the PMI Data still indicates growth.

This divergence could mean that the manufacturing sector is experiencing uneven growth, with some companies in certain sectors experiencing growth while others do not.

The stronger dollar, boosted by the better-than-expected ISM Manufacturing PMI, may also have contributed to the dip in the S&P 500.

S&P 500 1-Minute Price Data

In the latest speech by Governor Waller on March 27, 2024, Waller believes that the risk of waiting to ease policy is small compared to acting too soon. The speech had dovish tones throughout, but it could possibly signal a rate cut in the near future.

It could also mean that the market fluctuations seen today could normalize as monetary policy keeps up with the economy. The CME Fedwatch tool also expects a rate cut in June 2024, with 57.2% expecting 500-525 basis points.

Lazarus
Lazarushttps://ljlnews.com
Publisher and editor of LJLNews. I am a Stock Market enthusiast, with an interest for politics. I hope you enjoy reading the articles! Contact me at: Lazaruslucas@ljlnews.com

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